Monday, April 12 2010
What a difference a year, and maybe a little sunshine can make. Real estate sales in March were significantly better; by practically any measure, than they were just a year ago. January and February of 2010 from a local real estate perspective were virtually identical to the same two months in 2009, but everything changed for the better in March. Last month, in our area, we closed 391 home sales, compared to 307 a year ago, a 27.4% increase. The average sale price this March, on those closed sales was $123,980 compared to $114,002 last March, an 8.8% increase. Finally the supply of homes on the market, measured by month’s supply, declined to 7.45 months compared to 9.7 month’s supply last March. The 7.45 month supply was the second lowest monthly total in the past two years. Only June of 2009 with 7.37 month’s supply was better.
National surveys suggested that March was going to be a good month in many parts of the country. The Pending Home Sales Index (PHSI) is a forward looking indicator based on contracts signed, but not yet closed, increased in February. The PHSI in February of 2010 was 17.3% above the corresponding month in 2009. Since contracts typically take 1-2 months to close increased March closings were inevitable.
So what does this mean going forward? I am confident that closed sales in April will be significantly higher than last April. (OK I cheated on this one because I know that pending transactions were higher this March than last March) I am also confident that closed transactions will stay strong in May. The unknown is the degree to which the expiration of The Home Buyer’s Tax Credit will affect sales this summer. The credit expires if contracts are not signed by April 30. I believe that sales this summer will be similar to last summer’s putting our market on a more steady and sustainable level. I know we all want to avoid the significant price and sales declines of 2008 and 2009, and I believe we will; Great news for both buyers and sellers.