It's been a while since I have given an update because, quite frankly, it hasn't been real exciting to continue to report and that prices continue to decline. So what am I reporting today? The market is still sluggish and prices continue to decline.
There has been, however, some improvement in the pending sales (those not yet closed) of single family homes over the past four months. On a year to year basis those sales are 15% higher than last year. So that is good news of a sort. However, when we look closer at the numbers we see that the increase is concentrated at the lower end of the market, under $350,000, which is where the first time home buyers are shopping. Once you get above $350,000, the sales drop off dramatically and are still running about 30% behind the numbers for last year, which in itself was not a good year. Safe to say the $8000 taxpayer subsidy for first time home buyers seems to be having an impact, but that's about as far as it goes. To many of those purchases are of homes that are either short sale situations or foreclosures where the sellers of those homes are in no position to purchase another home, let alone trade up.
The pending sales of condos over the last four months are about the same as last year, so at least the situation is not growing worse. However, the sales are concentrated at the low end of the price spectrum, under $200,000. Above $200,000 it's still Death Valley Days for the condo market.
Right now we are hearing a lot of talk about the recession having ended, but from where we sit in your business it hasn't ended hear. Other than tax credit stimulated sales at the low end of the market, sales are not improving and prices are still going down. Before we can talk about price stability, we will need sales to improve about another 50% from their current levels. Not impossible, but it's hard to come up with the scenario where that will happen this year.
There has been improvement, but we need much, much more before prices firm up.