Things Are Looking Up (The Market Report)

There’s just no other way to say it, the market is looking up! Various news reports over the past months have pointed to this eventuality, but it’s nice to finally see some supporting stats.

RMLS released the June 2009 Market Action report and there are some extremely positive points to be noted:

• Same month pending sales were up for the first time since Dec 2006 (June 2009 vs June 2008 – pending sales up 8.4%)

• Inventory is at it’s lowest point since Aug 2007 – 8.2 months (great news!)

• Closed sales June vs May are up 24.5% (wow!)

I’ve been arguing for quite some time that the market had found equilibrium and it was just a matter of time before we saw some mild improvement. Inventory has been one of my major indicators, saying that once we saw inventory in the 8 month range, we’d see a marked improvement in the overall market. It certainly looks like that’s coming to fruition.

Of course, not everything is so rosy. The 12-month sales price is down nearly 10%. However, when looked at through the prism of the national real estate market, a 10% decline is very acceptable.

I expect the market to continue to improve through the rest of summer and early autumn. It will be interesting to see if the momentum will hold through late autumn and winter when the weather gets cold and gray. In the meantime, though, the $8000 tax credit available for first time buyers has certainly helped prop up sales in the $200,000 to $350,000 market. Close-in properties listed below $300,000 are still moving relatively quickly.

However, the tax credit is nearing it’s expiration date. Close of sale must occur before the end of November in order for buyers to tax advantage of the tax credit. With longer “shopping” times and a higher rate of sale fails, it’s imperative that first time buyers eager to realize the $8000 tax credit start the search and home buying process now.