Monday Market Memo for May 5-11, 2009

Here are the Palmer and Wasilla real estate statistics for the week. These numbers include all single family residences, (including cabins, mobile homes, and condos), for the the whole Mat-Su Borough.

The numbers remain relatively healthy. Closed sales are down a little from last week, but still much better than the winter. Notice that the pending and closed sales are much lower in price than the new listings or the total market. The action is in the lower price ranges.

 

Average Price Median Price DOM
New 42 $261,866 $227,250 .
Total Active 795 $284,826 $239,900 137
Pending 29 $204,710 $194,800 57
Closed 15 $195,367 $190,000 81

Interest rates remain at historic lows but I have been reading more this week about inflation in our future. Of course, that is always being written. But some of this is from people who do not normally talk about inflation:

Here is an example from the The Weekly Market In Review that I get from Alice Roe of US Bank:

While stocks and bonds are swinging around wildly there is some good news. Interest rates for conforming and FHA/VA loans are still historically low by many standards.

However, low rates are not a given considering the escalating inflation fears that reemerged recently. Oil prices rose most of last week and Fed Chairman Bernanke expressed concerns about “how to wind down the federal balance sheet” and “avoid inflation.” When a Fed official mentions inflation it is generally not positive for bonds. Inflation, real or perceived, erodes the value of bonds causing bond prices to fall and rates to rise. The last thing the economy needs now is rising mortgage interest rates. If inflation emerges that very well may happen despite the continued Fed efforts to keep rates low. With so much uncertainty, a cautious approach to float lock decisions, especially heading into the inflation data this week, would be wise.

Another article I got off www.realclearmarkets.com is also in part about inflation: Is America About To Go Broke?

Inflation will drive up interest rates along with all other prices. IF inflation comes, the buyers who locked in low interest rates will be happy campers…or home owners.