Tax credit deadline on April 30 raised the sales of homes in March 2010. According to U.S. Census Bureau, the purchase of new-homes in March increased the annual rate of sale of home to 411,000 and it is fastest sales since April 1963. Annualized rate surged 27% from February and not only pending home sales but the sales of new-homes rose. Tax credit deadline is behind the surge in sales of existing and pending homes.
The sale rose from March 2009 by 24% and economists are not sure if the sale will sustain in coming months as the tax credit expires. Many buyers couldn't spend on homes in February due to storms and in March the improvement in climate helped the buyers to take a final decision.
The chief economist at National Association of Home Builders said "I believe the growth may get flat after the expiration of tax credit" but he also expressed hope that the previous conditions of decline in home sales is over. There are many market experts who believe the market will sustain improvement beyond low mortgages and tax credit deadlines.
In the South, March sales was up 43.5% and in the Northeast the sales rose 35.7% .In the West, sales rose 5.7% and in the Midwest, sales was up 4.3%.
The inventory of new homes lowered from 233,000 in February to 228,000 in March. The median sale price of new home was low from $221,600 in February to $214,000 in the subsequent month and the price was up 4% from the same month in the previous year. New homes sale was at its peak in mid-2005, when the rate was 1.39 million.
It is surprising that many new buyers are not buying foreclosure homes, although, the foreclosure homes can be bought at a bargain price. Home buyers feel foreclosure homes are mostly in bad shape and to make the home habitable, a lot of money has to be invested in refurbishment. Many buyers have a pre-defined budget to spend in home buying and refurbishment costs make the spending go beyond limits. There are a few real estate firms that provide low cost foreclosure homes with refurbishment and maintenance features.
Mayfair Group gives an opportunity to overseas buyers to invest in cheap foreclosure properties in Detroit. The entry level 3-bed detached home is priced at $41,495.It is a free-hand property and the properties are priced at fifty percent below market value. Mayfair provides complete management of the properties, which includes the rehabilitation of a tenant in the house .The properties are approved by HUD and the refurbishment cost is included in the price of the property. Mayfair's local partners in Detroit also provides convenient "Exit" options and the properties can be sold at market price anytime after buying.
Drop in jobless applications in week ending April 17
The Standard & Poor's Super composite Homebuilder Index was up 4.5 % in the month and the labor department informed the jobless applications dropped by 24,000 in the week ending April 17.
Gasoline rise
Increase in home sales and improvement in job market raised the demand for fuel. National Association of Realtors reported an increase in sale of previously owned homes in the month of March and Dollar was up 1% against Euro, highest since May7.
Gasoline price rose in the week indicating an increase in demand for fuel. It is expected the rate is not the highest in April, in fact, it will continue to grow in coming months. The May delivery price rose 0.8% to $2.3002 a gallon at the New York Mercantile Exchange.
Interest rate of bonds rise:
Interest rates in bond market rose after the release of positive reports on job and housing but the investors believe the increase in rates may hurt returns.
Research: Interview with Real Estate Investor, Article Base and Few other website.
0 comments:
Post a Comment