December Real Estate Recap!

Tax Credit Gets Buyers Off the Fence
The new $6,500 move-up Homebuyer Tax Credit is apparently motivating buyers, according to a Campbell Communications survey of 1,500 real estate practitioners. Existing home owners accounted for 41 percent of home purchases in November, up from 38 percent in October, the survey found. “Current home owners jumped at the credit,” says survey research director Thomas Popik.
Source: Housing Wire, Austin Kilgore (12/22/2009)

Report: Home Prices Likely to Hit Bottom in March
Home prices in 45 of the largest housing markets are expected to fall another 4.2 percent before they hit bottom in March, according to First American CoreLogic’s LoanPerformance Home Price Index. By October 2010, prices are expected to be heading upward again by about 1 percent compared to 2009. The report warned that this progress could be jeopardized by an increasingly large “shadow inventory” of homes owned by banks but not yet on the market. The problem is particularly acute in Michigan and Ohio cities, the report said. It projected a 12.7 percent further decline in values in Detroit, an 11.4 percent decline in most of the rest of southeast Michigan, and a 6.3 percent fall in Cleveland.The report expects the strongest recoveries next year in California cities. These include:
1. San Francisco, up 5.7 percent
2. Los Angeles, 5 percent
3. San Diego, 4.7 percent
4. Sacramento, 4.6 percent
Source: Inman News (12/21/2009)

Economy Improving in 4th Quarter
The economy grew 2.2 percent in the third quarter. The U.S. Commerce Department had previously estimated a 2.8 percent growth rate. Officials attributed the discrepancy to consumer caution, saying that consumers simply didn’t spend as much. Many analysts still believe the economy is likely to improve in the current quarter, growing at an estimated 4 percent, or perhaps, even 5 percent. Fourth quarter results will be released Jan. 29.  Companies stocking depleted inventories will drive fourth-quarter growth, but the results will continue to reflect consumer caution. "We expect a better performance in the fourth quarter, but the core problems for the economy – bust banks and a massively overleveraged consumer – have not gone away," says Ian Shepherdson, chief economist at High Frequency Economics.
Source: Associated Press, Jeannine Aversa (12/22/2009)

Commercial Properties Continue to Decline
Moody’s Investors Service reports that commercial real estate prices continue to decline, slipping 1.5 percent in October.  They were 36.4 percent lower than they were in October 2008 and down 43.7 percent from their peak in October 2007. Calculations are based on repeat sales of the same properties.
Sources: The Wall Street Journal (12/22/2009)
California median price rises 5.8 percent in November

California median price rises 5.8 percent in November
Home sales in California increased 4.7 percent in November compared with the same period a year ago, while the median price of an existing home rose 5.8 percent, according to a report released yesterday by C.A.R. The median price of an existing, single-family detached home in California during November 2009 was $304,520, a 5.8 percent increase from the revised $287,880 median for November 2008, C.A.R. reported. The November 2009 median price rose 2.4 percent compared with October’s $297,500 median price.