Mark Levenson

Home Smart Realty West

Helping You Buy and Sell Homes, Condos & Investment Property

  • Direct: 619-850-7653
  • DRE #: 00787774
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Mark Levenson
Direct:619-850-7653
DRE #:00787774
Home Smart Realty West
2878 Camino Del Rio South, Suite 100
San Diego, CA
92108

January 2011 Market Conditions

The January 2011 Market Statistics are out
 
What will the housing market be like in 2011? Will it advance on positive economic news or will it retreat due to continued high unemployment? One thing is certain – housing in 2011 will be a unique market, the first to recover from a recession without a significant growth in jobs or incomes.
 
2011: A Period of Stabilization - Current trends show that the return to a more active sales environment will be gradual, and that adjustments must be made before any real growth can be experienced. We believe that the existing home sales market will stabilize throughout 2011.
 
Mortgage Interest Rates
During 2010, the impact of mortgage rates falling to historic lows continued to drive refinance activity above typical levels. By January 2011, interest rates approached the 5% range on a 30-year conventional loan, up from all-time lows of 4.2% in October 2010.

 
These historically low rates provided critical traction to the housing market, and will continue to benefit home buyers in 2011. The combination of lower prices and low interest rates has created unprecedented affordability conditions, which is an important reason housing sales are starting to grow again, according to the National Association of Realtors. The trade organization’s December housing report noted transactions were up 5.6% over November, prices up 0.4% over the previous year, and supplies down to 9.5 months vs. 10.5 months in November.
To put affordability another way, in 2007, at the height of the housing market, it took 21.7% of median family income to buy a home. The median existing single-family home was $217,900, mortgage rates were 6.52%, and households needed $61,173 to buy the median home.

 
In October 2010, housing prices were 30% lower, interest rates only 4.62%, and the median family income was higher by almost $1,000, meaning it only took 13.6% of household income to buy a home in Q3 2010. With interest rates expected to stay in the 4% to mid 5% range – which will continue to drive affordability – more buyers may enter the market in 2011. Distressed inventories must be absorbed before real growth in sales and prices can occur.
 
 
 
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Direct: 619-850-7653
 
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