Real estate seems to be on a pendulum. The first quarter of this year saw a rise in sales and prices. Then there was a dip in April followed by another rise. According to the National Association of Realtor’s® (NAR) chief economist Lawrence Yun, “contract activity over the past three months is fairly comparable to the first three months of this year.” He notes Pending Home Sales Index activity per region:
- In the West: pending home sales rose 3.6 % from June to July and are now 20.6% above July 2010
- In the Midwest: while sales slipped 0.8 % for that same period, overall sales were still 9.7% above July 2010
- In the South: sales fell 4.8% but were still 9.5% higher than July 2010
- In the Northeast: sales fell 2% but were 9.7% above July 2010
The underlying factors that signal an upswing in real estate include the following: rising rents, record high affordability and investors buying real estate as a hedge against inflation. Factors that will help boost sales include the returning of mortgage-underwriting standard to normalcy, the updating of appraisal valuations and the streamlining of the short sales process. Improvement in lending standards will give buyers the confidence to act.
I believe we are positioned for a healthy expansion. Call or email me if you’d like to discuss the market and your role in it.
Q: The recent reports of natural disasters have been making me wonder, “Do I have adequate homeowner’s insurance in case of an earthquake or flood?”
A: That’s a good question. According to the Insurance Information Institute , about 5,000 earthquakes occur in the U.S. every year. Yet even in earthquake-prone California, just 12 percent of homeowners have earthquake coverage. Four out of every five natural disasters involve flooding, yet less than one in five homes nationwide are covered by flood insurance.
The price tag for repairing flood damage to residential properties caused by Hurricane Irene could top $59 billion. An estimated 900,000 properties were damaged and many, if not most, are not covered by flood insurance according to CoreLogic. The average flood insurance policy in 2010 cost about $600 per year. The average claim over the past five years was about $34,000 according to the Federal Emergency Management Agency.
If you have questions, I suggest you read your policy or call your insurance agent. If you need some referrals, give me a call.