MARKET WATCH: 2008 Spring Housing Market April 1–NO JOKETuesday, April 1, 2008
April 1, 2008 — Two widely-discussed national statistics based on what happened in February are that overall home prices dropped and the number of homes sold increased. The media’s conclusion given from that data is that with lower prices, more people are able to buy. As seen by these graphs, there is more to that story.
When you look at the statistical graphs of residential housing activity by county, you will see the trends in the market for your area. In almost every county, more homes are coming on the market every month than are being sold increasing the total housing inventory. In many cases, housing inventory today is twice what it was in 2005. As with any commodity, when there is a surplus, there is downward pressure on prices.
Sellers who did not study these trends were holding on to the notion that their house was at the same price level before inventory began to increase in late 2005. After many months of hoping falling prices would end, sellers learned the reality of the market – until inventory is reduced substantially, prices would not go up. Now as sellers price their homes to match the current market seen by buyers, their homes sell. In many cases these sellers are still realizing a significant profit due to the appreciation in prices in the first part of this decade making up for the comparatively minimal decreases in the last two years.
Many buyers have held off purchasing for more than two years because the media told them the real estate market was “not good.” This has been especially true during the “mortgage crisis” widely circulated in the media over the last eight months leading buyers to believe that mortgage money was not available. Now more buyers understand that the “bad” news was not directed at them. With mortgage money available at low interest rates, coupled with a wide selection of homes at moderated prices, buyers are now purchasing in greater numbers.
If you would like to discuss the current market with me, or know someone who would benefit from this information, please contact me so I may be of assistance.
Licensed VA Real Estate Professional