Housing Market Continues to Stabilize in 2014

Housing market continues to stabilize in 2014

Inventory is steadily rising, while prices have also increased   Information from Jeff Detwiler of Long and Foster

We're now halfway through 2014, and as anticipated, the market has slowed down from the brisk pace of last year. It's a stabilization of the industry that was predicted by our team here at Long & Foster, and it's attributed to a variety of developments—three of which stand out as the most significant to me. First, the mortgage industry faced a changing regulatory environment as the Dodd-Frank Wall Street Reform and Consumer Protection Act took effect in January 2014. Lenders of all sizes were faced with challenges implementing the new rules and we're just now beginning to see how it's impacted the loan business. Second, the real estate industry has seen a slowdown in investor demand, which attributed to about 1 in 5 purchases in 2013. Now, though, as financing costs and property values have increased, investors aren't as eager to buy real estate. Last, and perhaps most significant, the low interest rates of the past few years have left many homeowners unwilling to sell. The 3.5 percent mortgage rates that spurred so many refinances and purchases have placed homeowners in a situation where they don't see the financial benefit of selling. It's the downside of low mortgage rates, and it's an issue I expect we'll have to manage for years to come. Regardless, we have seen many positive developments in the market this year. For example, while inventory remains low, it's steadily increasing. The National Association of Realtors (NAR) reported a 5.6-month supply as of May, which is much closer to normal than last December's 4.6-month supply. Sales prices also have been on the rise across the country. Both NAR and the Mortgage Bankers Association predict this growth will continue through the year, and we've seen such developments at Long & Foster.   While we're down year-to-date about 6 percent in volume and 7 percent in units, our sales are quite similar to the overall market. I'm confident our performance will continue to improve, and I'm appreciative of all you've done to help Long & Foster bring the homeownership experience to buyers and sellers across the Mid-Atlantic and Northeast this year. Let's keep up the good work as we move toward the future!   By the Numbers Wrap-up for June 2014   Real Estate: More than $2.6 billion in sales volume, a 10 percent decrease from June 2013, for a year-to-date total of over $15.2 billion Real Estate: 7,181 unit transactions, an 8 percent decrease from June 2013 Property Management: Created 127 new accounts and referred 25 of our current accounts to Long & Foster Real Estate sales agents for potential sales listing in the month of June Rental Service Center: Processed 1,663 applications and paid 1,322 rental cases, which includes placing a tenant, ratifying the lease and paying the leasing commission Mortgage: 581 customers served, earning over 23 percent of Long & Foster business Title: 1,477 customers served, earning more than 48 percent of Long & Foster business Insurance: 299 new policies issued, earning almost 10 percent of Long & Foster business