Bernanke gave an address on the Fed’s planned exit strategy as federal stimulus programs wind down. Realtors were concerned with mortgage rates shooting upward when the federal programs holding them down expired in March. but according to Chairman Bernanke, they may begin to rise, but it should be very slowly. USA Today reported this week that rates have dipped below 5 percent again, so rates still seem to be very favorable for buyers, and if things go as planned, they should remain favorable.
The L.A. Times reports that home sales for the 4th quarter of 2009 were up 13.9 percent from the previous quarter, and 27.2 percent from the 4th quarter of 2008, so the trend appears to be in the right direction. They also reported that the price of an existing median priced home for sale has risen 2.9 percent, so that is more good news.
However, the Savannah Morning News reports that in the Savannah area home sales have dropped off in January. January 2010 sales are down 10 percent from January 2009 sales, and 20 percent from January 2008 sales. January 2010 sales are down 50 percent from December 2009. There is always a bit of a drop off around the holidays, and that is what the local Realtors are hoping is the case. Other people are not so sure, they are concerned that everyone who was planning on buying, already purchased a home when they thought that the tax credit was going to expire last year. Opponents to the tax credit called this “borrowing tomorrow’s buyers.” People who had planned on buying a home this year, rushed to purchase a home last year due to the tax credit.
The lack of buyers in many parts of the country may simply be due to the weather. The Mid-Atlantic area has had record amounts of snow this year, and most people aren’t concerned with house hunting when they are shovelling out their driveway, and hoping their power comes back on. The Philadelphia Inquirer reports that the weather has played a large part in the slower home sales in that area.
We’ll see how it goes over the next several months. I personally don’t think the housing market will begin to rebound until the employment picture brightens. Unemployed people don’t buy houses, and people who are concerned they may still lose their jobs don’t buy houses. How does all of this apply to old houses? If you have an old house for sale, make sure it is priced correctly, shows well, and that you have an experienced, aggressive Realtor. If you are looking to purchase an old house, as I’ve said before, there may never be a better time. And if you have been thinking about a restoration or renovation project on your old house, you may never find better pricing from quality contractors than you can now.