So, How’s the Real Estate Market?
Posted on | June 30, 2009 | No Comments
“How’s the market?” This is a question that I answer daily, and it really is not a quick or simple answer. I heard a great analogy the other day, likening the current real estate market in Charleston to the first signs of Spring. You see the first little green buds, and wonder, “will these stick around and bloom, or will it freeze again and kill them?”
Right now, we are seeing signs of improvement here locally. The overall number of active listings is declining slightly; there are 9% fewer active listings right now than there were in June of last year. Last week, there were 5200 showings. We’ve had 5200 or more showings in one week 13 times in the past year, but 12 of 13 have been the last 12 consecutive weeks. Closed sales in May were down 22% from May ‘08; however, that is the least we’ve been off since November of 2007.
Many things contribute to bringing more buyers into the market place, among them are surging affordability, the $8,000 tax credit, and increasing interest rates creating a sense of urgency, and reasonably so. Although prices may continue to decline, the overall cost is probably going to increase. We generally expect rates to increase pretty quickly and dramatically from their current levels, and they have already started ticking upward. We expect a surge of buyers in the next 60-90 days, which will help with decreasing inventory. However, a full 20% of homes currently selling are short sales and foreclosures. So, while we expect numbers of sales to increase, we also expect prices to continue to decline as sellers try to compete with the short sale and foreclosure market.
The First Time Buyer credit seems to be starting to show the expected ripple effect. In March, 53% of the buyers (nationally) were first time buyers. In April, that number decreased to 40%, indicating that more “move-up” buyers were free to purchase their next home.
In summary, it looks like things are lining up (declining prices, rising interest rates) so that it makes sense for sellers to sell and for buyers to buy. To me, this sounds like a balanced market and I hope that is what we are moving towards.
Comments
Leave a Reply
