A Nationwide Look-See At Housing

The Office of Federal Housing Enterprise Oversight (OFHEO) (gadzooks, what a crummy name!), is the agency that oversees the big mortgage finance companies Fannie Mae and Freddie Mac. They've just released some studies that indicate the housing market is substantially cooling. (I hope this did not come as shocking news to these government bureaucrats.)

To demonstrate its brilliance and timeliness in projecting market conditions, the agency report cited higher interest rates and rising inventories of homes for sale as possible factors in the slowdown. My, what earth-shattering news! Could it be that somebody in the OFHEO decided to go out and try to buy a house only to learn of these conditions?

"These data are a strong indication that the housing market is cooling in a very significant way," said OFHEO Director James B. Lockhart. "Indeed, the deceleration appears in almost every region of the country."

I think the data are a strong indication that Mr. Lockhart finally read that copy of the Wall Street Journal that has been sitting on his desk since January 11th.

Well, enough about Mr. Lockhart. Let's see what the report had to say ...

• The South Atlantic area -- Delaware, D.C., Maryland, Virginia, and Florida -- registered the biggest slowdown in prices since at least the early 1980's (yes, early 1980's). This region's rate of increase from the second quarter of 2005 to the same period in 2006 was 13.7%, far below the 17.4% rise posted from last year's first quarter to that of 2006.
• In New England the year-to-year rate dropped to 5.68% from 8.71%.
• In Arizona, housing prices showed the highest growth rate of all the states, about 24%.

Where are prices growing the fastest? It now appears that the metro areas in North Carolina, South Carolina and Washington state are the places where prices are increaseing the fastest right now. These areas are experiencing robust growth in population and employment, so that growth in value seems logical.

Okay, so what does this mean?

• Essentially, it means that the market is COOLING across much of the nation. COOLING does not mean prices are coming down. Clearly this data indicates that prices are still going up in most areas, but not as quickly as they have been in the past year or so.
• If you're a buyer, now might be a good time to purchase. It appears that waiting for prices to get lower is not a wise strategy as prices continue to rise, just at a slower rate.
• If you're a seller, you must accept the fact that your house is not appreciating like it did in the past couple of years and adjust your selling price to fit the new reality of today's market. Also, you need to be patient and let buyers come back into the market.
• If you're a government bureaucrat, thanks for catching up to what the rest of us have known about real estate for months and months, and for once again releasing a bunch of confusing statistics for us to wade through, and for wording the report in such a way that even people well-versed in bureaucrat-speak probably had difficulty understanding what you meant.

To keep up to date on real estate matters, keep reading this blog. For more info on real estate in the Tampa Bay area, visit my website at www.thestpeterealestatesite.com.

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