There are undoubtedly good things happening in the market. Home sales are up, inventory is down. Statistics show an improving market, but sellers are still frustrated by falling values.
Easier access to credit is one of the factors contributing to the increase in sales. Prices are still being affected by distressed properties, but selling distressed properties will eventually increase home values.
Lawrence Yun, National Association of Realtors chief economist, said that he believes that home sales in the last three months indicate a growing stability in the real estate market.
“The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
According to national data from NAR, the latest figures show total existing home sales rose 5.0 percent in December, and are 3.6 percent higher than levels in December 2010. The estimates are based on a representative survey of completed transactions from multiple listing services that include single-family homes, townhomes, condominiums and co-ops.
Pending sales open a window to the future. December saw a slight decrease from a 19 month high but they are still above last year’s totals.
Yun also said the trend line remains positive.
“Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,” he said.
Locally, we are seeing similar numbers. Using MLS figures, brokers represented an average of 34,000 active listings each month. The Eastside leads the listings with over 50 percent over the other 21 counties that the MLS covers. Home sales are up 7 percent and condominiums are up 10 percent over last year’s figures. It is not surprising that sale prices were down 10.3 percent over the entire MLS market. Each subdivision is unique, however, with home values affected by many factors including the number of distressed properties.
Pending sales have outpaced national figures, increasing 10.5 percent over 2010. New listings are down. Combined, these factors contributed to the decrease in inventory. Multiple offers have been reported in many areas.
Using MLS data to specifically look at what the Eastside is doing, properties are maintaining a slightly lower depreciation rate.
Inventory is down 22 percent. Active listings are down 24 percent. Pendings are up 8 percent and closed sales are up 12 percent. The one negative is the decrease in sales price of 7 percent. These numbers are bringing every area into a balanced market with a 4 month supply of homes.
These numbers include distressed properties which only account for approximately 25 percent of total sales. Sellers should have confidence that if their home is priced right and is in good condition it will sell. Non-distressed properties still bring in a higher price partly because they are generally in better condition.
Now it is more important than ever for realtors to show lenders and appraisers comparable properties that are non-distressed to help stop the downward flow of home values.
Buyers should understand that credit is available. Each lender has individual requirements and a discussion with several lenders may be necessary before receiving a loan approval.