investingfromtheright

I am retired and take educated guesses on all things financial.

May 07, 2009

May 7, 2009: CSFB Monthly Real Estate Survey

Credit Suisse First Boston publishes what I consider to the the best monthly survey on the nations housing market. This survey is done through the eyes of on-site consultants that know the area where they work. CSFB then assimilates their own proprietary data to then arrive at a general and region specific report.

For the time period ending April 30th, here are general comments from this exhaustive document:

Buyers respond to low mortgage rates and prices, looking for foreclosures. Nationwide, there was increased buyer traffic in April,especially in beaten-down markets where buyers went searching for foreclosures and other bargains. The best markets were those with high levels of foreclosures (Ft. Meyers, Las Vegas, Los Angeles,Orlando, Phoenix and in Inland Empire). However, these are some of the weakest markets for new home sales. Dallas and Atlanta were the two markets with the worst traffic during the month.

Lower mortgage rates and the first-time buyer tax credit generated significant activity at the low end of the housing market.

Home prices remain under pressure with some beaten-down markets showing movement towards stability. Washington and the Inland Empire (CA) posted the highest prices. Elsewhere, new homes are 30% more costly than comparable foreclosed homes, thus new home sales are lousy.

Builders continue to mention their concern about converting contracts into closings due to appraisals that often come in below the purchase price as appraisers use extreme caution - using foreclosures as comps. In addition, foreclosures and short sales remain the toughest competition.

In short, the landscape for real estate favors investor pools snapping up homes and lots at bargain prices. The balance between new and existing real estate sales remains in a state of flux - regardless of what politicians are doing - and the light at the end of the tunnel may still be an oncoming train.

If you are an investor, these are the best of times if you buy right and buy smart.

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