Returning to Real Estate

If you are a Realtor® who took a step back from the business due to the economic climate in recent years, now might be a good time to consider returning to real estate because home sales are starting to creep back up while interest rates remain low.

According to National Association of Realtors® data, existing home sales rose nationwide in August, following a correction in July. According to the latest information, existing-home sales­­—completed transactions involving single-family homes, townhomes, condominiums and co-ops—increased 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August, up from an upwardly revised 3.84 million in July.

According to Freddie Mac, the national average interest rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.43 percent in August from 4.56 percent in July; the rate was 5.19 percent in August 2009. Interest rates haven’t been this low since 1963.

Nationally, sales remain 19 percent below the 5.1 million-unit pace in August 2009, but at least they are showing improvement over recent months. Sales improved across most regions of the country over the same period last year. Plus, median home prices are generally up too.

Seeing that the numbers are up across the country is another incentive for returning to real estate, no matter where you live. For instance, existing-home sales in the West jumped 13.8 percent to an annual pace of 990,000 in August, and in the Northeast they rose 7.9 percent to an annual level of 680,000. The median price in the West was $214,700, which is 2.5 percent below a year ago, but in the Northeast, the $260,300 median price in was up 7.6 percent from a year ago.

 Existing-home sales in the Midwest increased 5.0 percent in August to a pace of 840,000. The median price in the Midwest was $149,600, up 0.4 percent from August 2009. In the South, existing-home sales rose 5.2 percent to an annual level of 1.62 million in August but are 13.4 percent below August 2009. The median price in the South was $155,000, down 1.5 percent from a year ago.

Total housing inventory at the end of August slipped 0.6 percent to 3.98 million existing homes available for sale, which represents an 11.6-month supply at the current sales pace, down from a 12.5-month supply in July. Less supply is expected to lead to higher prices, which is good news for people selling condos and other homes.

Existing condominium and co-op sales increased 8.5 percent to a seasonally adjusted annual rate of 510,000 in August from 470,000 in July, but are 17.1 percent below the 615,000-unit pace in August 2009. The median existing condo price was $174,000 in August, which is 2.8 percent below a year ago.

While NAR economists predict the recovery will be slow, returning to real estate now would be good, because buyers are gaining confidence, and starting to take advantage of the low interest rates and deals available with foreclosed properties or short sales.