Residential Real Estate Bids Adieu To October 2013
As an odd October 2013 draws to a close, the real estate market is among the industry sectors quite happy to see it over. WIth interest rates creeping upward since summer, August and September indicators were already pointing at home financing slowing to a crawl through the second half of the year. On the heels of pending U.S. home sales slowing in August and a 5.6% drop in the sales pipeline in September, the government shuttered its doors. As the full moon rose over a nation back to work on the third Thursday in October, we are all looking for equilibrium, or at least some very good clues for the winter.
In September 2012, Trulia announced it would discontinue its housing barometer in its current form introduced 18 months earlier to track housing market recovery. Citing conflicting data in taking the temperature of key market indicators, the doctor has gone into consultation this autumn. “Tracking the recovery’s progress as a single number is not the best approach anymore,” said Jed Kolko, chief economist at Trulia. While experts struggle to define the new normal, the patient continues to show schizophrenic behavior. Unable to shine a clear light on a confirmed diagnosis, it seems everyone has gone shopping for a new thermometer.
First, the good news
No one is shouting good news from the rooftops, but the news is far from all bad. In analyzing the best and the worst of the housing bust, Trulia says we’re two-thirds of the way toward full recovery. However, the National Association of Realtors points at the government shutdown as a new key indicator for October, sure to have a knock-on effect. With IRS offices closed, delays in tax transcripts needed for approval of mortgage loans ground to a standstill. Not only were government and contract workers left sitting it out, but also overall consumer confidence “curbs major expenditures such as home purchases,” said Lawrence Yun, NAR chief economist. Meantime, the question remains the same: what about prices? Funny enough, the government shutdown did not seem to affect asking prices negatively in the first half of October, according to Trulia.
Location, location, location
A San Francisco Bay Area-based realtor with Coldwell Banker, Susan Hewitt underscored the topsy-turvy conditions found in the current housing recovery. Hewitt noted, “There really is no such thing as a national response to the very local question on everyone’s mind: should I buy or should I sell?” Through three generations in the family business, Hewitt has seen lots of ups and downs, but at the moment she cites location as being more pertinent than ever. “We see micro-sized pockets of double-digit price rises with competitive bidding situations happening next to depressed markets just one county over.”
While the old thermometers point to a flat remaining couple of months in 2013, we trust that those shopping for the new thermometers will bring them to market very quickly so that we can properly take the temperature for the 2014 housing market outlook.
Laurie JM Farr is a freelance writer covering all things in her adopted San Francisco. A dedicated urbanite, she’s a transplanted New Yorker by way of a couple of decades in London as a hotel sales and marketing manager. Follow her work on @ReferencePlease, USA Today, Yahoo! and on Examiner.com.