Market conditions for Real Estate

The team at Coldwell Banker, Marion -------------->


Today at Coldwell banker, we toured two properties that recently came upon the agent’s books. I like viewing the properties for sale with the other agents because it gives me an insight to what the agents then suggest to the seller in order to make their property more appealing for potential buyers. I learnt that Standard & Poor’s/case – shiller allows for home price indices in order to track changes in the value of residential real estate. While the Freddie Mac calculated house prices projected on what a given house purchased at a point in time, which would be worth, today if it appreciated at the average appreciated rate of all homes in the area. The actual value of any house will depend on the local real estate market, house condition, and age, home improvements made and needed. We also discussed the very low mortgage rates, which came out for the 15-year and 30-year fixed period. I decided to look into the last three weeks economic history in order to gain an understanding of why the low mortgage rates came to be.

On the week of April 26^th 2012, the federal government stated that it expects economic growth to remain moderate and then pick up gradually. Labor market conditions improved in recent months and anticipate the unemployment rate to decline gradually.

On the week of May 3^rd 2012, there were signs of slowing economic growth and inflation remained unresponsive which allowed the yields on treasury bonds to ease somewhat and brought most mortgages rates to a low record. The real gross domestic product that week rose at an annualized rate of 2.2% in the 1^st quarter of this year down from the previous 3.0 and below the market forecast of 2.5%. The twelve months growth in the core price index of personal consumption expenditures was 2.0% in March, which matches the federal reserves inflation target.

On the week of May 10^th 2012, there was a weaker than expected employment report and the French and Greek election resulted in raising concerns over the stability of the Euro currency zone, long term treasury bond yields declined allowing fixed mortgage rates to ease to new all – time record low (30 years at 3.83%; 15 year 3.05%). The economy added only 115,000 jobs below the market consensus forecast & less than in march. Although the unemployment rate decline, it reflected fewer people actively seeking jobs.