National activity reflects some improvement in real estate

Some good news this past week from the national market as reported by the National Association of Realtors.

Home Purchase Applications Rise: According to the Mortgage Bankers Association, applications for home purchases rose 1.5 percent. Although this is down 33.7 percent from last year, it is up 7.4 percent from four weeks ago. Lower prices, good inventory and low interest rates are commonly thought to be the driving forces behind this renewed interest in home purchases. FHA loan applications rose 3.4 percent or over twice as much as conventional loans.

Mortgage Rate Falls Under 4.5 percent: 30-year fixed loans closed at 4.49 percent, down from 4.5 percent a week ago and 5.22 percent a year ago. Fifteen-year loan rates fell to 3.95 percent, down from 4 percent last week and 4.63 percent a year ago. The Idaho Housing and Finance Association rate on Friday was 4.25 percent.

Construction Spending Up in June: However much of the increase is actually driven by Government spending. The construction of new homes declined nationally by less than 1 percent while federal building rose 4.6 percent.

Locally our new construction still lags behind last year with 263 new homes sold so far in 2010 compared to 295 at this time last year. Our total home sales continue to outperform last year's sales however with an increase of 27.4 percent overall.

Even with the uncertainty in today's housing market, many are finding compelling reasons to buy. As mentioned above, mortgage rates have not been this favorable in more than 50 years. Our local inventory is up just over 1.1 percent from last year which is far less than the increase in number of units sold.

The increase in unit volume has led to a shorter supply in terms of months of inventory. Known as the "absorption" rate, this tells us how long it will take to absorb all inventory currently on the market. Today's absorption rate is 17.9 months compared with 24.6 months last year at this time. We take that as an indicator the market is improving. Also, our "days on market" figure has shortened somewhat, with the average market time of 120 days down from 127 days last year.

So what does all this mean to you? As a seller, you still have lots of competition. Price your home well and it is likely to sell. If it is an average home, plan on waiting four months for a ready buyer, at an average price. Lower price = quicker sale.

If you are a buyer, you will buy more house for less money than at anytime in the last few years. You will also save big on interest over the term of your loan. There are plenty of homes to choose from in a variety of price ranges, so you are likely to find a nicer home too.

For a safe trip Home, call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling 667-0664 with your questions or commentary.