This is due to the reduction in number of people defaulting on their mortgages, down 40% over the same time last year.

Also, in general, across the U.S., home sales have risen over the past six months. See more details in the Bloomberg article and the CNN interview with Secretary Donovan.

Secretary Donovan said according to the CNN interview,

“Foreclosures are coming down. They’re down about 40 percent since last year,” said Donovan, who joined President Barack Obama’s Cabinet in 2009. “So, we are making progress, but rightly, the American people recognize we’re not where we need to be. We still have a ways to go.”

According to the Bloomberg article,

“Contracts to buy previously owned U.S. homes rose 8.2 percent in May, following a revised 11 percent drop in the previous month, the National Association of Realtors said on June 29. A separate report by the Chicago-based group on June 21 showed sales of existing houses, which make up about 96 percent of the market, declined in May to a six-month low.”

I will be curious to see the Towson real estate market update from June, because here in our area, we did not see increases, like the NAR’s statistics from May.

Contact me for details on your Towson house value, because each neighborhood is retaining or losing value separately.

On the Realtor.org website, they discuss the implications:

• FHA would not be able to insure/endorse any new loans.
• IRS cannot process federal tax returns. This means that if your bank is requesting your 2010 return for your loan, and you have not filed yet, you would not be able to get this. Also, if you were planning to use any money from a possible refund, you would not be able to get that money, since they will only be processing payments.
• USDA loans, if not fully committed, would not be able to be processed until funding legislation is enacted (even past the government restarting).

Other things that I have been discussing with others that government employees attempting to get loans need to take into consideration should the government shut down:

• Employment Verification. If you work for the government and your bank needs to do their verification of employment, is that person who does the verification there?
• If you are a “non-essential” government employee, are you currently being paid? Does this affect your qualification for the loan?

This could be devastating for those who are under contract and hoping to close in the next few weeks. Banks will not be able to start the FHA loan process, order appraisals, or get case numbers until resolved.

What other implications for homebuyers and sellers will there be?

One of the factors used was that the National Association of REALTORS(R) (NAR) stated that pending home sales were up 3.5%, showing that more buyers are moving into the real estate marketplace, and a sense of confidence about future home prices rising.

The Washington Post article by Neil Irwin also states that many consumers are paying down their debt, and lenders are loosening their credit availability, also adding to the ability of potential homeowners to buy houses. They do think that residential housing still won’t be a huge factor in the growth, saying,

Few forecasters are expecting major improvement in the housing sector, which has been a drag on the economy for four straight years. But neither does housing appear set to be a major drain on growth. Residential investment constituted its lowest proportion of overall economic activity on record in the third quarter, meaning that even if it were to contract a bit, it would have little impact on growth.

There also is a glut of houses in foreclosure, waiting to be released for sale. Banks have estimated these to be in the millions. This year, we do not expect to see housing prices rise in the spring as in the past, as I discussed in my post,”Will My Timonium House Be Worth More in the Spring?”

So what does this mean?

It means we it appears we are in the beginning of recovery in our recession. This takes time.

It also means that sellers need to be aware that low prices are what are driving buyers into the real estate market. To sell your Baltimore County home, you need to be priced aggressively and show beautifully.

For more information on your Baltimore County neighborhood, contact me. I am happy to help!

I was asked to present based on my experience and success using social media to enhance my Towson real estate business.

The four networks I discussed were Facebook, ActiveRain, Linkedin, and Twitter.

Although I also actively participate on Trulia and Zillow, I only had 20 minutes to present! On May 21, 2009, I have been asked to present a follow up because there was so much interest from the Baltimore realtors.

I met some fantastic people, and enjoyed speaking with many of the attendees afterwards. I am looking forward to the next presentation, and will also be teaching another 1.5 CE credit course on the same topic for GBBR on May 28, 2009.