Real estate recovery? Not in Ann Arbor despite national sales uptick in September
What supports that claim? Existing home sales grew by 410,000 that month over August - though skeptics may point out that year-over-year numbers didn't improve.
“A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium,” said NAR chief economist Lawrence Yun, in a statement released Monday.
That made me wonder: Do September sales give us that indication in Washtenaw County?
Our September numbers, as reported by the Ann Arbor Area Board of Realtors, show sales of both homes and condos were essentially flat over 2009. The gain of 3 homes and 5 condos in the "sold" column represent small percentage increases. The days on market dropped in both categories.
And the dollar volume grew by less than $1 million for homes, climbing to $49.3 million, while it fell for condos, even through more sold for a collective $660,000 drop to $6.32 million.
Does that signify a rebound?
Not really, I thought.
And I confirmed that with the owner of one of the county's leading real estate companies, Edward Surovell Realtors.
Surovell noted that at this time last year, sales were buoyed by the federal first-time home buyers tax credit and a few hundred more homes listed for sale.
Today, inventory is shrinking, "and that's good for people with houses already on the market," Surovell said.
Also notable about this fall is that "if you need to sell your house and you're able to sell it at market price, it will sell," he said. "... There is a real market."
But the number of foreclosures and short sales are still pressuring prices, as is the lack of inflation. The average sale price in September was $184,965, compared to $188,774 in September 2008.
And it's that price dynamic that has Surovell watching for signs that all of the activity soon could be boosted by climbing prices, too.
"The prices are extremely stable," he said, "... but we don't want them to be stable. We want them to go up."
Sellers who are "under water" on mortgages struggle when they need to sell, and that stifles the natural market when people get inspired to find more space, a different neighborhood, new room configurations - in other words, the type of housing market that we witnessed for years. The one where if we decided we wanted a new home, we'd go out and shop for one, knowing we could get financing and sell our old homes.
"For many people, they have made the decision not to move because they can't afford to do so," Surovell said.
But the key concern moving forward continues to be inflation and how it affects the housing market, Surovell said.
He points out that interest rates are low enough - under 5 percent for both 30-year mortgages and under 4 percent for 15-year versions - that the fed "is giving money away," but values remain low.
"And there's no indication from the number of foreclosures or number of short sales or from the flat prices that it's fair to say we can look next year to a reasonable rate of inflation," he said.
Could the NAR economist end up being right?
On a national level, Surovell sees stability, "which does matter."
And the Michigan election, which will send a new governor to Lansing with hopes of change could reinvigorate consumer confidence.
He also is staying hopeful that the local real estate market - since Ann Arbor is a prosperous town by most standards in Michigan - will improve further in 2011. Overall numbers for the year show some gains.
"Next year I'm just hoping for better," he said. "We're getting back on the right track, just not very quickly."