Monday, July 27, 2009

Home Sales Rise - is this good?

Home sales are up and prices are down, but it that the whole story? Many articles in the past week have mentioned this trend but on careful reading how does this news impact home sellers? Here are a few core facts we noticed in the avalanche of data:

  • Inventories of previously owned homes fell 0.7% at the end of June to 3.82 million available for sale. That represented a 9.4-month supply at the current sales pace, compared to 9.8 in May. - Wall Street Journal, June 23
  • The median sales price was $181,800 in June, down 15 percent from year-ago levels but up slightly from $174,700 in May. - CBS News
  • The real improvement was in the months’ supply of inventories which dropped significantly to 8.8 months from 10.2 in May and its peak of 12.4 in January. - WSJ Blogs
  • ...buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales must be completed by the end of November for buyers to take advantage. - Associated Press
Now we're not jumping on the "Everything is rosy now" bandwagon, but these are all indications that prices and supply are starting to level off. For home sellers it is important to understand what part of the market your in. For sellers on the high end time is still a factor; most of the sales are concentrated with first time buyers at the low end of the market and with investors snapping up houses for rental. For higher end sellers it is important to have a realistic time horizon and take the time to create a home marketing plan.

Homes are selling if you take the time to know your market.