SELLERS: As noted last month, the inventory has taken a dramatic dive due to the tax credit. This means there is less competition. We are about to enter into the spring market, so inventory will begin to increase again. But, the extended/expanded tax credit will be pushing people to look for homes earlier than what is typical. So there is a great opportunity there for the right sellers. You can grab this anxious market and get a decent price for your home, if it is a "First time home buyer" home, which is typically $300k or less. There is no crystal ball, but with the tax credit plus fantastic rates, I believe that if you are considering selling your home in the next 24 months, NOW is the time to do it. The conditions may not be this good for a couple of years.
Is it a good time to sell? We talk with home owners on a daily basis who are asking this specific question. A general rule to follow when determining if now is a good time to sell:
- Move-up: if you are selling a home and looking to ‘move-up’ or buy a more expensive home, the very best time to do this is when the market is down (like now)
- Move-down: if you are selling a home and looking to ‘move-down’ or buy a less expensive home, the very best time to do this is when the market is hot (not now)
BUYERS: It's simple:
- Home prices are low
- interest rates remain low
- you get $8000 for buying a home as a first time buyer, or $6500 if you currently own a home.
Right now, as a buyer, your purchasing power is at a high point. If you have some cash set aside and you qualify for a good mortgage, then you have the power to buy. That puts you in a VERY good position. We highly recommend you take steps to become a home owner. If that is you, please contact us, as I can help you put together a plan to get there.
Active Listings (Supply)
Seasonally we are at a low point for inventory levels. When you look at the graph, one thing that to notice is that Supply is at a lower level for the month of January than it has been for three years. That's a very good sign. Come June we will have a much better idea of whether the inventory will stay low or not, and that depends on what the demand is.
Sales Closed by Month (Demand)
Just as with supply, we are at a seasonally low point for demand. The next couple of months will be very telling of where the market is and is going. We have seen a tremendous amount of interest and activity in real estate. More than this time last year. This Spring market is going to see a lot of activity.
Average Sold Price
After seeing the Average Sold Price (ASP) take a nose dive in the fall of 2009, due to the heavy activity under $300,000, we are seeing the ASP start to creep back up. January started out 14% up from the January 2009. That is another positive sign for a market recovery.
Sold To List Price Ratio (SLPR)
The SLPR still seems to be indicating that the market is going to stay down. It is a general consensus that the homes that sold in January were put under contract in November/December. What was going on in those months? For the most part buyers that might have missed the tax credit and were trying to get a deal. It may have also been home owners that were getting desperate to sell and were willing to take less for their homes. There is no way to tell for sure. It would be surprising if the SLPR stays in the low nineties over the next several months. If it moves to the mid nineties, then that would be a great indicator of the market leveling out.
