Finally some good news for housing, according to news reports last week sales of existing homes posted a slight increase for the first time in 6 months. Last months gains were driven by more aggressive price cutting by sellers in many parts of the country. In the South, existing-home sales increased 2.1 percent to an annual rate of 1.99 million in February but are 22.0 percent below February 2007. The median price in the South was $163,400, down 8.6 percent from a year ago.
The National Association of Realtors said that sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million units. Many economists were predicting a small decline and were caught by surprise with the largest increase in the past 12 months. The NAR reported that the median sales price of single family homes fell 8.7%to $213,500 from February 2007.
I do not want to read too much into the one-month rise in sales. The slump in Blue Ridge housing market will likely continue until the high levels of unsold inventories are reduced. Coldwell Banker High Country Realty experienced an increase in activity with 37 sides going to contract for the month of February. Other companies are reporting their traffic is up and they are writing contracts as well.
The good news for the North Georgia market is that inventory levels have begun to stabilize around 15,000 listings. The spring and summer buying seasons will be the real test of whether the housing market in North Georgia is in fact bottoming out.
For more information on the North Georgia real estate market and access to the Northeast Georgia MLS database please visit http://www.buyblueridgerealestate.com/.
The turn around will not be as quick as equity investors experience in the stock market. It will take time to bleed off the excess inventory; however, we have seen a huge drop off in new construction and land development so the supply
of new listings will be primarily resales. Sales have been greater than housing starts on a regular basis since early 2007.
I believe that the worst is behind us and that this may be the best time to buy in many years. Lower interest rates have made mortgages more attractive. The national average for a 30-year conventional fixed mortgage was 5.92% in February, vs. 6.29% a year earlier. There are a host of initiatives being proposed to bolster the sagging market and bail out homeowners facing foreclosure.