HomeServices of America Residential Real Estate Market Update
Posted by Haley Dalton — September 15, 2010
ATLANTA (Sept 10, 2010) – The seemingly precipitous drop in July existing home sales, while alarming, was not unexpected, says Ron Peltier, Chairman and CEO of HomeServices of America, Inc., a Berkshire Hathaway affiliate (www.homeservices.com) and the nation’s second-largest, full-service homeownership service provider.
“Our Pending Sales numbers for May and June reflected an inevitable slide after the government incentives came to an end this summer,” said Peltier in a statement to the company’s more than 15,000 sales associates. “The positive uptick in July Pending Sales gives the market hope that consumers are beginning to move past the purchasing-paralysis that set in as government incentives came to an end this summer.”
Peltier noted that, big-picture-wise, unemployment and consumer confidence are the two chief elements that continue to negatively impact today’s real estate market. “We noted mild encouragement in the August Consumer Confidence Index,” he notes, “as short-term term outlook improved, but labor market concerns continued as a drag on the Index. We believe that as those numbers trend in a positive direction, we will begin to see the volume of transactions mirror the increase in confidence.”
“While there are certainly plenty of negative headlines in the news, the consumer who is most benefiting from this challenging environment is the one who is confident in their employment, with strong credit, or cash-buyers,” he states. “For this segment of the market this may be a once in a lifetime opportunity to purchase.”
“The combination of affordability and generationally low interest rates has created an unprecedented opportunity for buyers in Atlanta and the surrounding areas,” says Dan Parmer, President and CEO of Harry Norman, REALTORS®. “The qualified buyer is clearly in the driver’s seat in this environment. All of the market factors are working in their favor.”
Peltier adds that the current market is an absolute boom for that type of buyer, with the average 15-year fixed mortgage below 4%, and 30-year jumbo rates setting new record lows in the 5.2% range. Home values are generally down to 2002 levels, and, U.S. mortgages, though more challenging to secure, are at rates last-seen during the Eisenhower administration more than 50 years ago.
As to addressing today’s home seller, Dan Parmer concurs with Ron Peltier, noting that“for the overall market, we need to help consumers recalibrate their financial expectations of homeownership. Most people saw their homes as automatic wealth builders. That is simply no longer a guarantee. Yet, as the financial/investment side of homeownership may be in an adjustment period, I genuinely believe that the value of homeownership is as strong as ever. I’ve no doubt that people want to own their homes.”