Market Update

August 31st, 2009 by admin

•”There’s a bifurcation of the market,” he said. “There’s excess supply putting downward pressure on prices and people respond to the lower prices by buying homes.”

•Housing is its most affordable in many years, he pointed out. “Falling prices is not part of the problem, they’re part of the solution,” he said.

•Hurting home sales have been stubborn increases in job losses. More than 6.7 million jobs have been lost since the beginning of 2008. That’s one reason why Robert Dye, a senior economist for PNC Financial Services (PNC, Fortune 500), is keeping his optimism in check.

•”I wouldn’t go overboard on this number,” he said. “The economy is still healing and will continue to run into some bumps. But it does bode very well for the future and shows buyer confidence is increasing.”

•There is one potential bump, however: The looming end of the first-time homebuyers credit. The credit gave first-time homebuyers an up to $8,000 refund on their taxes if they close on a deal before Dec. 1. That credit has been motivating buyers, and when it expires, demand could dry up.

•Where homes are selling Regionally, the strongest market was the Northeast, where sales soared by 13.4% to an annualized rate of 930,000. That was 3.3% higher than last July. The median price of homes sold during the month was $236,700, off 15% from last year.

•Midwest sales rose 10.9% to a 1.22 million rate, 8% higher year-over-year. Prices there have sunk 5.9% over the past 12 months to a median of $157,200.

•In the South, sales were up 7.1% from June and 5.4% from last July to a rate of 1.95 million. Price have dropped 7.1% to $164,500 over the past 12 months.

•The only region reporting a slip in sales was the West, where they fell 1.7% to a rate of 1.13 million. That was ahead of last July, however, by 1.8%. The median price there was $202,300, a whopping 28% below what is was a year ago.

Local Market Conditions

The Birmingham Metro Market remains a comparatively strong market. Most housing forecasts predict Birmingham to be in the top 10 recovery markets due in large part to our community’s relative economic stability and the fact that this market never experienced the lows experienced in much of the nation.

Locally, inventory levels are dropping. There are currently 13139 homes on the market representing an 11.4 month inventory. Average sales price as a percentage of final list price has increased from the November low of 92.23% to 95.27%. While still a strong Buyer’s Market, the Birmingham market is inching its way back to normalcy. With shrinking inventories especially in the New Home category, prices have stabilized considerably with signs that this sector may well see rising prices by next spring.

With the First-Time Home Buyer’s Tax Credit set to expire this December 1st, some buyer incentive may be removed from the market. However, with rising interest rates combined with the current low prices and a strengthening housing market, there remain strong incentives to act now.

Now back to my standard opening line … How is the market? “Well that depends on which market you’re referring to?” Every market is different. Generally, the market is improving … The American Dream lives. As always, get the advice of a trusted Realtor about your specific market and circumstance.