We all had this subconcious feeling in the back of our minds that it's still happening, even though home sales have picked up, but we didn't want to believe it.  Well, now it's in black and white.  We have to accept it -- Home prices are still dropping. 

That means buyers are definitely still in control of the marketplace, and they are out there in droves.  Just because overall home prices are dropping, however, doesn't mean there are not homes selling for more than the listed price.  For the simple reason that the buyers are all around us, and they are coming out enmasse, means that the prices are still lower, but the number of sales are picking up. 

Does this mean that the market is starting to recover?  I believe so, for the often-overlooked concept of supply and demand.  Less supply equals more demand.  If there are 10 homes in a neighborhood, and then suddenly there are 7, the demand for the remaining 7 is going to intensify.  Because the demand raises, the prices will go higher.  We are seeing this now in some homes that are selling for more than the listed price.  It's not because the agent didn't do his/her homework and severely underpriced the home (at least most of the time).  It's because the law of supply and demand. 

The home prices may still be dropping, but the number of sales are increasing because of it, and that will be the turning point for the market in the long run.

 

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