The lower ranges, especially distressed properties, are receiving multiple offers. It is difficult to gauge the current real estate market by reading the papers or listening to newscasts. The best way to assess what’s going on in is to poll the Realtors® out in the field, writing offers, guiding buyers from home to home, and representing sellers in the marketing and selling of their homes. The reports are in: the lower ranges, below $500,000, are seeing plenty of activity, with multiple offers and buyers losing out on their first choices. The lower ranges were hit the hardest through the subprime shakeup and they slowed first. Logically, it seems appropriate that this range, the entry level, would be the first to heat up. The below $500,000 range accounts for 45% of the current active inventory and 50% of the most recent demand. One year ago, it accounted for 26% of the active inventory and 28% of demand. First time buyers are stepping into the fray with their first real opportunity to purchase in years. When the expected market time is below the 5 month mark, it is a seller’s market. Everybody is looking for a deal, but it seems that the banks are in the driver’s seat. With the new FHA and conventional loan limits coming, the upper ranges will witness a similar boost in demand shortly.

Demand, the number of homes placed into escrow within the prior month, increased modestly by 73 homes in the past two weeks from 1,820 to 1,893 escrows. Demand is at levels not seen since June of last year. The current active inventory climbed by only 20 homes in the past month two weeks to 15,412 homes. With the active inventory virtually unchanged, coupled with a slight increase in demand, the expected market time dropped from 8.46 to 8.14 months today. That’s a stark difference from the 15.60 month inventory at the beginning of the year. It is still a “buyer’s market,” just not as deep. Last year at this time there were 12,558 homes on the market, demand was at 2,338 escrows and dropping with the start of the subprime crunch, and the market time was at 5.26 months and climbing. Two years ago, there were 9,562 homes on the market and rapidly climbing, demand was at 2,779 escrows and the market time was at 3.44 months.

 

What’s the difference between the condominium market and the detached home market? The detached home market continues to fare better than the condominium market with a 7.88 month inventory, the first time below eight months since May of 2007. For condominiums, there is an 8.67 month inventory. 31% of the detached home inventory and 37% of the condominium inventory is either a foreclosure or short sale. 67% of all detached homes below $500,000 are either a foreclosure or short sale. For condominiums, 54% below $250,000 are distressed.