If, indeed, your home is your castle, are you ready for some good news about your arrowslits, your sally ports and your crenellated parapets? (OK, someone’s been Googling “castles” again).For many Clark County residents, the home is their biggest investment, and the largest bulge in their retirement portfolios. But as all of them know, the last five years have been unmercifully cruel to those assets. The collective value of residential property across America has plummeted 23 percent since 2007, according to Bloomberg News. For local castle owners, that painful statistic is not a surprise. But it still hurts.
Fortunately, some recent good news indicates we’ve not only bottomed out on the home value and home sales crisis but in fact are in the early stages of a recovery. We’ll start at the local level: As Cami Joner reported in a Friday Columbian story, home sales in Clark County during May grew 12.9 percent over the same month last year, to 473 from 419 in 2011.
Flash in the pan, you ask? We don’t think so. “June’s going to look even better, based on the activity we’re seeing now,” said local broker Terry Wollam. And what Wollam is seeing now are 558 “pending sales” (as of May), which means contracts have been signed by both sellers and buyers.
More good news: The median price (half sold for more, half for less) was $197,000 in May, and that’s a 3.7 percent increase compared with May 2011. This is a far cry from those delicious double-digit increases we saw back during boom times around the turn of the century. Then again, we know what those boom times led to, don’t we? No need to review that wreckage.
On the national level, home equity during the first quarter climbed to the highest level in almost four years. American homeowners now possess equity in about 41 percent of their home values, and that’s the highest percentage since the third quarter of 2008.
We’re hoping all of this good news — locally and nationally — accelerates the economic recovery, because both sellers and buyers would benefit.
And for those people who are considering both selling and buying, the positive momentum grows even more quickly. Not only is your home value rising, but mortgage rates have dipped to 30-year lows, to numbers most of us thought we would never see. Nationwide, a 30-year fixed mortgage is running about 3.67 percent on average. A 15-year rate is at a near-subterranean 2.94 percent. Those rates have triggered a rush on refinancing applications.
Why is all this happening? Various reasons are at play. Some people are just getting tired of the housing slump and are willing to take a risk. Others want to position themselves on the cutting edge of a recovery, sell and buy and then wait for their equities to soar. Other folks like the idea of buying another home and keeping their original home as a rental investment.
Let’s not sweat the details. Let’s just cross our fingers and hope it all continues. And if you were looking for the right time to make a big move, consult your favorite real estate broker and mortgage consultant.