I hope all had a happy, safe time last week and are resting for this week's continuing festivities and the end to a very interesting and challenging year. After a year of crazy low mortgage rates, expect the line on the graph above to continue upward through 2010 if Freddie Mac is right. The mortgage financier expects rates to climb to 6% by the end of 2010.
Our inventory numbers for Monday the 28th of December, 2009 are:
MLS-listed Properties in Cocoa Beach and Cape Canaveral
Condominiums, all prices______567
_____Sold and closed in 2009__402
Single family homes, all prices__120
_____Sold and closed in 2009____77
Condos over $500,000________69
_____Sold and closed in 2009__29
Homes over $500,000_________46
_____Sold and closed in 2009____5
I will post a full year end review the first week of the new year after the listing agents have (hopefully) had time to update their listings. It is apparent now that we will finish 2009 with sales slightly ahead of the last two years.
A little commentary on the numbers so far; all of the sold over-$500,000 homes were in Cocoa Beach, none in Cape Canaveral. Of the 29 sold condos over $500,000, 15 were at the Meridian of Cocoa Beach and only one of the 29 was outside Cocoa Beach, an oceanfront Shorewood unit in Cape Canaveral. Over three quarters of all sold condos in the two cities in 2009 closed for less than $300,000 and just less than two thirds of the sold homes fell in that price range. Expect that trend to continue in 2010.
"You can clutch the past so tightly to your chest that it leaves your arms too full to embrace the present."____Jan Glidewell
The housing market did show signs of some type of life form. I just don't see how interest rates can jump-as put forth by the above-with foreclosures and unemployment climbing. Florida home prices stand to drop another 20-30 percent.
ReplyDeleteHigher rates would be death to your already reeling market. I would not expect or put forth Freddie Mac to be my choice-as any type of guide-for reference.
How about Morgan Stanley? They are predicting a rise in rates to 7.5% to 8% on 30 year mortgages. Link here - http://tinyurl.com/ybnmygx
ReplyDeleteMore supporters of a 6%+ rate by the end of 2010; BNP Paribas, Credit Suisse and JPMorgan Chase
ReplyDeletehttp://www.bloomberg.com/apps/news?pid=20601087&sid=aukqYVzx6x3w&pos=5
With unemployment still high and nothing close to any numbers turn around in sight,economic growth numbers being revised downward and with slowing demand for new mortgages fueling downward pressure on rates---and--millions more homes going into forclosure---I can't see any turn around in the near future. People need jobs--decent paying jobs--not flipping burger jobs. It would be a mistake to allow a false recovery to sway ones vision of security anytime soon. I stand PAT.
ReplyDeleteEstimates of unemployment plus under employment currently run around 17%. There is a huge dockett of foreclosures still making its way through the system. The tax incentive for home buyers will expire later this. Savings rates are increasing. Investors are sitting on large amounts of cash unwilling to take a chance on stocks or real estate. Even small increases in mortgage rates drops demand for refi's and raises the probability of even more foreclosures. Heck, I must have seen 10 prime time TV ads yesterday for foreclosure lawyers. The current scenario is much too fragile to support a 30 year rate over 6%. These end of 2010 bank forecasts smack of the old buy now before rates go up routine. Policy makers are looking at a pick your evil situation of low interest rates or another 15-20% drop in home prices. IMHO, there will be another run at 4.5% before we see 6%.
ReplyDeleteI agree that political actions may make the economists' predictions wrong. The bailouts of the last year have certainly proved that natural selection is likely to be interrupted when policy makers have an agenda at odds with the direction that fundamentals are taking the economy. My original post was pointing out a major player's prediction for interest rates, not my own.
ReplyDeleteI appreciate the comments from all. In the interest of continuity, if you want to post anonymously, it will make it easier for the rest of us to follow if you choose a pseudonym like "Geronimo", for instance, rather than no name at all which shows up the same for everyone as "Anonymous".
Anyone care to venture any 2010 predictions for other indicators, stock prices, rates, etc.?
I do not agree with one statement made by anonymous on 1/2/10--Savings rates are increasing-this is a false-hood-they get this number from a decrease in spending--so they sayyyy savings has increased. The truth is people don't have anything left at the end of the week to save. Real time wages have regressed back to the year 2000.If you look at any financial indicator,we are far worse off now.Think about $3.50-$4.00 per gal. gas. Thats just around the corner again. Iran controls 45% of the worlds oil supply. With the unrest and turmoil in that country you can forget about any hope that the economic crisis is behind us. BUT--all hope is never lost--just misplaced. Things will turn around,but time is the factor.
ReplyDeleteInteresting that the numbers posted here seem to show the lowest inventory and at the same time, the lowest prices over the past three years. Isn't that contrary to supply and demand theory? What's going on?
ReplyDeleteSupply and demand: I think the biggest factor is the absence of the artificial demand (speculators) that we had during the boom years. All that artificial demand pushed prices up until it stopped working. We are adjusting back to normal demand now and the market is trying to find the new normal, whatever that is. The occasional distressed sale still screws with the prices.
ReplyDelete