Hope is in place for sales: Local real estate pros optimistic spring will reinvigorate home market
(Milwaukee Journal Sentinel, The Via Acquire Media NewsEdge) Jan. 24--The area's slumbering housing market could awaken as spring nears if mortgage interest rates remain at historic lows, real estate pros say.
They say, however, that a number of other things need to happen -- specifically a rebuilding of consumer confidence -- before a robust market can launch.
Whether or not a recovery is in the offing, the market will remain favorable for buyers, according to lenders and real estate agents.
"So many things are well-aligned for first-time home buyers," said Judy Hearst, regional vice president for Coldwell Banker Residential Brokerage. "The opportunity is there.
"Rates, inventory, prices really make it an advantageous time to buy a house," she said.
Although reduced mortgage rates are fueling a refinancing boom, they have prompted a more subdued reaction on the sales side, as robust inventory chases demand that is being squeezed by consumer fears about the economy.
If you are worried about losing your job, buying a house is the last thing on your mind.
"We've got some activity out there," said Paul Liebe, president of Redefined Realty. "Hopefully, there will be a big boost," when spring arrives, he said. Still, the pace of sales remains somewhat slow, even with an uptick that has occurred in recent weeks, he said.
Hearst also noted an increase in business in recent weeks.
So did Leo Fitzgerald, general sales manager for the Brookfield / Elm Grove First Weber office.
Traffic at open houses, as well as phone inquiries, had picked up as of last week, Fitzgerald said. "There isn't much of a reason not to buy."
Except for the worries about the economy.
"They're feeling out their own job security and (the stability of) the companies they work for," Fitzgerald said. "If you could remove that from the equation right now," the real estate market would likely soar.
Potential buyers also may be waiting to see what further incentives might be coming as part of a stimulus / rescue package under consideration in Washington.
Mortgage buyer Freddie Mac reported that the national average rate on a 30-year fixed-rate mortgage for the week that ended Thursday was 5.12%, with 0.7 of a point paid by the buyer. That's up from the previous week's 4.96%. Last year at this time, the 30-year rate averaged 5.48%.
Mortgage borrowers in Wisconsin traditionally choose to avoid points, an upfront fee charged by lenders, preferring to pay a slightly higher interest rate.
For refinancing, "there's no downside," and homeowners are taking advantage of that, said Greg Kolton, president and CEO of Foundations Bank in Pewaukee.
Mortgages sought for home sales, though, are still slow, he said. "That whole side of the aisle has been very quiet.
"I think people are on the sidelines, waiting to see what happens," with a new president and the economic stimulus efforts already in place as well as stimulus that might be coming, Kolton said.
New home construction is also slow. "There's not much going on right now in terms of lot sales," Kolton said.
"They are sitting on the ones they already have before they start anything else," Kolton said of builders he has talked with.
Overall, though, most things needed for home sales to rebound here appear to be in place.
"If some good news begins to take root," the market most likely will begin jumping again, Kolton said.
"There are some real bargains out there right now."
Tips and tactics
Here's some advice from mortgage and real estate professionals if you are thinking about buying a house or refinancing:
--Don't stay on the fence too long. A buyers' market can shift to a sellers' market in a season.
--Figure out how much you can afford. Talk to a loan officer or bank you trust. Ask what incentives are available.
--Don't assume you can get the lowest mortgage interest rate. If you have a credit score below 740, for example, your mortgage interest rate might be bumped higher.
--Once you settle on an interest rate, don't second-guess yourself if rates go lower.
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