Prices have improved, homes are selling and it’s still a buyer’s market
Prices have improved, homes are selling and it’s still a buyer’s market
By GWEN LILLEY
Two seemingly contradictory truths are very much at play in today's regional and local housing markets.
The first is homes are selling. It's taking longer, but they are selling. Many sellers are also getting better prices than they did this time last year.
The second is this is still very much a buyer's market and will be until we get back to a six-month inventory of homes for sale on the market. Currently individuals and investors are finding bargains and the fact that buying on the local market is cheaper than renting is a powerful motivator. It also doesn't hurt that mortgage rates are back to record-lows.
Those market realities are sometimes mentioned in the various popular media reports on the housing market, but it's not exactly the top focus. That's because the general or popular media focuses on what's new or titillating and leaves it to the consumer to keep track of the bigger or overall picture.
Just to refresh the context, let's look at that "bigger picture" with the most current local data available at this writing.
The Tri-Cities entered the recession late and is recovering earlier than the national economy. As of the end of the second quarter, the job market was back to pre-recession levels according to ETSU economist Steb Hipple. Retail sales collections have also been consistently up for the past several months.
July's regional existing home sales were 25.9% higher than they were in July last year and the average sales price increased by 24.1%. The price in the 11 counties monitored by the NETAR Trends Report was $176,064. Sales were up in nine counties and the average price increased in eight. Sales increased in six of the cities monitored by the report and the average price increased in all seven cities. Of course, July is one of the traditional better months for home sales so better numbers were expected, but that's only part of the picture.
Yes, the average price in the Trends Report changes every month. It marks the ebb and flow of each month's market activity; however, trend watchers will note that the monthly average has been above the weighted average for seven of the past 13 months. That's a pretty solid indicator of an improving instead of an imploding market.
Two other primary areas "big picture" items trend watchers monitor is the CoreLogic Home Price Indices and foreclosures.
Currently foreclosure sales account for about 16% of the local home sales. That's about half of what they are on the national market. Foreclosure activity is important because they add to the already high inventory and depress the price other properties can demand. But here's where trend-watching pays off. RealtyTrac's second quarter average price and discount analysis of REO, or lender owned, properties was good news for the sellers and not-so-good news for the buyers. In both cases the average price is higher than last year and the average discount was lower. Foreclosure bargains still exist, but they're not as good or as plentiful as they were last year.
If all of the "big picture" perspective seems confusing, it's because it is. There are myriad factors that affect the housing market and conditions can vary widely not only from town to town but also from neighborhood to neighborhood. That's why it's important to tap into the best information sources possible to capitalize on opportunities. The time-tested way to do that is to partner with a professional REALTOR®. They live with these myriad of market complexities and contradictions every day. They know what is working and what's not.
The state of today's housing market is more complex than usual so whether you're a seller or buyer, having a real estate professional in your corner is especially important. Call a REALTOR® today and make their expertise one of your real estate success tools.
