The market as a whole may be slow, but there is competition for good homes in popular neighborhoods.
Looking at some of the statistics about low prices and the high number of homes for sale, you'd figure that as a buyer you could take your time and have your pick of houses.
Good homes in desirable neighborhoods are going fast, even in hard-hit markets. First-time homebuyers are finding themselves competing with investors ready to pay cash.
Kim and Steve Duty lost the first home they bid on in Denver, much to their surprise, to a cash buyer who paid $400,000 for the home, which had been listed at $399,000. When they found a second home they wanted, they moved quickly to put in an offer.
"Buyers come into this market and they’ve read all the reports in the newspaper about what a bad market this is," Hornung said. "They offer 'X' percent below the asking price, whether it is 10% or 20% or whatever. And if they are relocating from a bubble market like Phoenix, they’re offering 40% below, because that is what you do in those markets."
They quickly learn that, if you find a good house at a good price, you need to move fast. Because investors will, and so will buyers who have learned their lesson after being outbid on previous houses.
It's the second piece of moderately good news this week, but it probably doesn't mean the housing crisis is over.
The spring home-selling season did come this year after all.
The National Association of Realtors' index of pending home sales rose 8.2% in May, after falling in April. Last month's level of pending sales (contracts signed but sales not closed yet) was 13.4% higher than in May 2010, when a tax credit had just expired.
The month-to-month increase was the largest since last November and signals good news for stabilizing prices, according to the Realtor group.
"Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace," NAR chief economist Lawrence Yun said in a news release.
This was the second piece of moderately good news this week, following Tuesday's report that home values had risen slightly, according to the Case-Shiller index.
Yun said that the number of home sales would be 15% to 20% higher if borrowers weren't having so much trouble getting mortgages. "If banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector," he said.
Tech millionaires with money to spend are driving up prices in some affluent California communities. Other nearby towns aren't feeling the love.
As we all speculate whether the the latest not-as-bad-as-usual housing price report from Case Shiller is a harbinger of better times to come, we'll share with you a story about a place where house prices are strong and on the way up: Silicon Valley.
That's right. A new crop of tech millionaires are helping to drive up the prices in the cities outside San Francisco where many Internet companies are located, Dan Levy reports at Bloomberg. In Palo Alto, the home of Facebook (and of Stanford University), for instance, the median price of a single-family home is up 20% compared with May 2010.
If you have to ask, you can't afford it. The median home price in Palo Alto is $1.63 million, so it helps if you're got some money from an initial public offering or a venture capital firm. Facebook founder Mark Zuckerberg recently bought a 5,617-square-foot house in Palo Alto for $7 million.
"It’s just the beginning of the story and I suspect we’ll see an explosion in the next couple years," Kenneth Rosen, chairman of the University of California, Berkeley's Fisher Center for Real Estate and Urban Economics, told Bloomberg. "You’ve got young people with real money, and it’s not surprising they want to have a house."
The Case-Shiller index shows a month-over-month increase, but it could be because of better weather. Or maybe it's the beginning of an improvement.
For the first time in eight months, housing prices didn't fall — sort of.
The latest S&P/Case-Shiller Home Price Indices found that prices rose for the first time in eight months, 0.7% for the 20-city index and 0.8% for the 10-city index But those numbers are not seasonally adjusted. If you apply the seasonal adjustment, which takes into account that spring is a better homebuying season than winter, prices fell again.
"In a welcome shift from recent months, this month is better than last -- April’s numbers beat March," David M. Blitzer, chairman of the Index Committee at S&P Indices, said in a news release. "It is much too early to tell if this is a turning point or simply due to some warmer weather."
While the indices showed prices up from March to April, they were still down 3.1% for the 10-city index and 4% for the 20-city index from April 2010. Nationwide, home prices are back to their 2003 levels.
As usual, whether the news was good depended on where you are.
Real-estate maven advises first-time buyers to have more nerve than she did when she pulled out of her first apartment purchase at the last minute.
Real-estate maven Barbara Corcoran still remembers the first place she wanted to buy. It was a top-floor, one-bedroom apartment in Greenwich Village, offered for $40,000 back in 1977.
Then she got cold feet and failed the co-op interview on purpose. It was a hard lesson. Prices skyrocketed after that, and it was another eight years before she could buy a place.
Her lesson for first-time buyers? "The first home is the most important — it gets you into the game."
It's no surprise that Corcoran thinks now is a good time to buy, while prices are low and mortgage rates are cheap, whether it's the bottom of the market or not.
"You always have these cycles," she told Candice Choi of The Associated Press. "And when it's down it can stay down for a while. But when it decides to turn the corner, it always comes back like gangbusters. And then you'll be waiting in line with all the other buyers."
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Corcoran, who founded The Corcoran Group real-estate brokerage in 1978 and sold it in 2001, has written three books, is an investor on the reality TV show "Shark Tank" and does a weekly commentary on real estate on "The Today Show."
Her top advice to someone looking for a house is to buy with your heart and not your head, a contrarian view to those who have resale in mind even before they buy.
"You can look at all the aspects that make a purchase practical, but that kind of thinking makes it an investment rather than a home," she told Choi. "I've never seen anyone who bought leading with their heart ultimately regret it. If you love it, the next buyer is going to love it, too."
Here is some other advice from Corcoran for buyers and sellers:
- If you're a buyer, ignore the asking price. Base your bid on the sales of comparable properties.
- If you're a seller, be realistic about the price and your competition. As she told Choi: "When considering where to price it, it's not the kind of market where you price high and see what bids come in."
- Look for an agent who has sold other homes at your price level. Interview his or her past clients to see if they would work with that agent again.
The waterfront Connecticut mansion is being offered at $28 million after a major makeover. The late actress designed the house with toy building blocks.
One of the favorite stories about the late actress Katharine Hepburn is that she would swim in the ocean off her home in Connecticut, even in winter. She must have done something right: She lived to be 96.
After her death in 2003, the home she built on the family property in Old Saybrook, Conn., sold for $6 million. Hepburn had supervised the building of the 8,368-square-foot home in 1939, after a hurricane the year before destroyed the house her parents built in 1912 for $2,400.
The builder who bought the home in 2004 has now put it on the market for $28 million, following a complete renovation that included lifting the brick home five feet off the ground to protect it from flooding.
New York builder Frank Sciame, who with his wife, Barbara, was Hepburn's neighbor, also opened up the house, removed the pine paneling on the walls and added larger windows, bringing a water view to nearly every room. This gallery of 25 photos shows the home's new light, bright seaside cottage look.
Large master suites weren't common until the 1980s. But the move toward bedroom as retreat probably began after World War II.
If you're of a certain age, you remember when there was no such thing as a master bedroom suite. The parents may have gotten the biggest room, but they often shared the hall bath with the rest of the family.
In the last 20 years, the master bedroom has grown from a place to sleep into a status symbol. If you don't have a seating area in your bedroom, double sinks in the bath, a spa tub and a separate shower, you're nobody. And size matters.
When my parents bought their first (and only) house in 1966, the fact that there was a tiny half-bath off the master bedroom was considered highly unusual and one of the reasons they chose that house. Most of the other ranch-style homes in their Midwest neighborhood had one bath in the hall.
A second bathroom became common not too many years later. But the giant master suite has really only been around since the mid-1980s, Erika Riggs at the Zillow blog writes in a post on the evolution of the trophy master suite.
- MSN Lifestyle: Get the bedroom of your dreams
Before central heating, small bedrooms shared by a number of people were the norm for everyone but the wealthy. It was only after World War II, as the country adopted a 40-hour workweek and people had more leisure, that a house began to be thought of as anything more than shelter by the middle class.
The really big master suites started in the mid-1980s, as the energy crisis eased, and a “huge house was no longer an energy drain,” Ohio architect Richard Taylor told Zillow. His blog has a number of posts on good design in small spaces, including a post on smart planning to save space in the bathroom.
Young couples in poll cite uncertainty over where they want to live and saving for a down payment as two key reasons they're still renting.
When analysts talk about why people aren't buying houses, they mention the economy and uncertainty over whether housing prices have hit bottom.
But a new poll by The Nest, a website for young couples starting out, finds that first-time homebuyers are staying on the sidelines for more practical reasons: They don't know where they'll settle for the long term (which could be tied to job uncertainty) or they're saving for a down payment.
While the poll isn't scientific, it does provide some insight into a key housing demographic, young people who are getting married and starting families.
Of the 1,473 people who responded to The Nest's request to participate in the poll, only 2% said they were waiting for the market to recover. The most common reasons given for not buying a house yet were uncertainty over where they would settle (32%) and saving for a down payment (36%).