It is starting to look like there may be some consistent improvement in the local real estate market, at least as it relates to the sales of single family homes. Last month, the pending sales (those under contract but not closed) of single family homes showed an increase over April of last year. That was the first time in quite a while that we have seen an improvement in year to year sales, for pretty much any category of housing.
The improvement that began in April has continued into May. Over that period, the pending sales of single family homes in Monmouth County has been about 13% higher than for the same period last year.
Good news indeed, but we are not out of the woods just yet. Although we are happy to see improvement, the increase is not enough to stabilize prices. There is still a heavy oversupply relative to demand and to get to a point of price stability we will need to see sales improve year to year by about 75%, not the 13% we aer seeing now.
The closing of single family homes are still way behind the pace of last year. For April and May, those number are almost 27% behind last year. Also, condos have not shared in the good fortune. The pending sales continue to track behind the numbers of last year and the closings are off by even more than the single family homes.
The increased sales activity seems to be concentrated in the lower end of the price scale where you typically find first time home buyers. I would appear that the $8000 tax credit available to first time buyers is stimulating sales. Here is a crazy idea. If the tax credit is getting people into the market and buying, why not extend it to everyone, not just first time buyers. Why not say that if you buy a home as your primary residence, you get the tax credit also. Those in government say that they want to support the housing market. This would be a great opportunity to do something that might actually work.
Let's keep fingers crossed and hope the sales continue to improve.