Market’s Picking Up… But How Much?August 12, 2009
If you follow the real estate market, you’ve probably heard that things have been picking up these last few months. Q1 2009 was ice cold. The market began to thaw in Q2, and here in Q3 we’re continuing to see a lot of action. Most of the churning is taking place below $1M, but there has been a higher incidence of luxury homes selling these past couple of months.
How much has the market picked up? We set out to find the answer using a very simple approach. We tallied up all the Single Family Home and Condo sales taking place per month dating back to June 2006. Here’s a look at the trend:
A few items to note in this chart:
- SFH = Blue Line, Condo = Green Line
- Winter troughs and summer peaks are clearly visible.
- The winter trough between late ’08 and early ’09 lasted a lonnnng time. No surprises there, considering the economy and collective consciousness of last fall.
- We’re not cheerleaders, but the numbers for July ’09 are the best since October ’06 when it comes to single family home sales volume.
- Condo sales are out of the gutter from the winter but still struggling compared to ’06-’08.
- For those thinking that short sales and REOs are the reason for the big recovery in single family home sales, note this: The median sales price for single family homes during the month of July 2009 was $785,000. A total of 49 sales were either REO or short sales, which equates to 20%. Sounds somewhat plausible to us, as 20% is quite significant. It would be nice to know the normal REO/short sale activity so we could see how 20% relates. Anyone know where to find this? MLS just started tracking this so we came up empty handed when researching past dates.
- Despite 20% of single family home transactions involving REOs and short sales, there is still a lot of bonafide activity out there.
The market is indeed warming up. As a personal testament, you may have noticed we’ve been posting less. Not because we’re losing interest in blogging, but because we’re absolutely slammed right now. Buyers are more confident about getting into the market than they have been in recent memory. Matter of fact, we just got into the market ourselves (again).
Most know that a second wave could be coming, as unemployment and more foreclosures are indeed in the pipeline. However, it will be tricky (but not impossible) to measure as action on the low end is holding things up at present… action that will likely continue for the foreseeable future as long-term investors and those flush with cash take advantage. Bottom line? Buyers, always be in it for the long term. Sellers, prepare for a busy post-Labor Day rush before another winter trough.
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