People ask me all the time...
How's the market? Are people buying? Can someone actually sell their home in this market?
First, my 2 cents worth...There have definitely been some encouraging signs of late and this summer has been a busy time, but we're still a long ways from a "healthy market." Are we "at the bottom?" That is the million dollar question. Many economists and prognosticators have boldly claimed that the worst is behind us and real estate is "on the way back up." My personal opinion - no. I think we're certainly at or near the bottom, but I believe the bottom will be around for a while. I think prices will continue to drop to some degree, although I certainly believe they will drop much less rapidly than they have over the last 6/12/18 months.
Here's the main difference I've witnessed between this winter and this summer...
This winter, a home that was listed in decent condition at a rock-bottom price may still sit and sit and sit on the market as few people were actually signing on the bottom line and purchasing homes. This summer, a similar home is under contract in 15 days or less (often with multiple offers). Does this mean there's huge demand/competition for decent homes? Not necessarily. However, if the home is well-priced, in good condition, and in a good location, then yes, these homes are in high demand.
It's a beauty competition out there. Those with the looks, talent and charisma get the prize; everyone else falls by the wayside. Do we remember the names of the 1st runner-ups in the Miss America contests or the teams that lost the Superbowl/NBA Finals/World Series? Probably not. Will a 2nd tier home "win the prize" and receive offers (offers worth consideration, anyway) in our market? Probably not. Buyers have gotten very, very, very picky (as well they should). If they find a home with so much as a beauty mark (unless the home is priced 20% or 30%...or more...below market value), they're likely looking elsewhere. Why wouldn't they?
The biggest problem I see with this...the average seller just doesn't understand that selling their home in today's market requires nothing less than a minor miracle. Most sellers just can't (or don't want to) understand that their competition isn't their neighbor down the street who "doesn't have as nice a yard" or "doesn't have a half-bath on the main level." Their true competition is the 100 foreclosures/short sales/corporate-owned properties within a 5-mile radius that are 30% cheaper.
Secondly, in addition to my personal experience/opinion, as you who read my blog already know, I like to show you the cold, hard facts and let you make your own judgments. June and July have actually been very good months relative to the market of late. This is certainly encouraging, but we've still got a ways to go...
OK - on to the facts...
The National Association of Realtors reported that pending home sales rose in June for the fifth straight month in the US. This was the 5th consecutive month that pending home sales rose. A rise in five consecutive months has not happened in 6 years (July 2003). The results were far better than analysts expected.
Also, for the first time in five years, home re-sales have risen for three months in a row, increasing almost 4 percent in June. "The housing market is healing and the patient is getting healthier at an accelerating pace," said economist Joel L. Naroff, president of Naroff Economic Advisors Inc.
Here in the South, we have experienced the biggest increase. The pending home sales index jumped 7.1% to 100.7 in the South (compared to only 2.9% to 100.4 in the West, 0.4% to 81.2 in the Northeast, and 0.8% to 89.9 in the Midwest).
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Sales of new homes also posted their largest monthly gain in nearly eight years in June. The Commerce Department reported that sales of new single-family homes rose 11% in June (economists only expected a 3% increase).
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Remember, the 1st time homeowner tax credits (and other credits) will be expiring soon. Click below for a current run-down of the available credits...
And finally, a word of caution regarding the tax credits. If you claim eligibility, you better make sure you're on the up-and-up (because the IRS is going to do their part to make sure you are)...
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