As we’ve been telling you in these articles, we expect sales to trend downward once official numbers were released, and that is the case. We still have some pretty good numbers though, and as you can see by the chart, the 2nd quarter of 2010 is the 2nd highest on record. 2009 was the highest on record. We’re still topping 2005 levels by a large margin.
Home sales fell 12% in June over last year, down from 1,705 last year to 1,501 this year. Last month sales were 1,460, so we actually picked up a few sales. Single family home prices were also up about 10% over last year. Median price this year is $96,600 in June compared to $87,900 last year. Prices were roughly even in May 2010, so prices pretty much held steady.
Condo prices also held steady, holding at $131,400. They were $131,900 in May, and $125,300 last June. Condo sales were up 11.11%
So what does all this mean? We have seen an increase in phone calls lately and an increase in buyer activity in the higher price ranges. This is a departure from last year when buyers only wanted the bargain basement homes. Buyers in the higher price ranges still want value and are not willing to overpay by any means, but at least activity is picking up. This can be attributed to the higher priced homes coming down in value and entering the buyer’s radar screen on where they perceive values should be.
Buyers don’t always have a realistic view of what properties are worth, just as many sellers don’t. The exciting time in the market is when buyers and sellers perception become closely aligned. It is precisely then that transactions can occur.
We would have more transactions occurring if more sellers could afford to sell. Many sellers just owe too much to sell at these bargain prices. Of course, if more sellers could afford to sell it would add inventory, so the market has a way of balancing itself out.
We don’t think prices are going back to 2005 levels any time soon, but at least prices are on the rise, and home sales are faring well. I’ve spoken with a few lenders who have said mortgage applications are down. This is true in SW Florida and nationwide. We have seen an influx of cash buyers again as banks are sometimes stingy with the money. We have seen some lenders loosening some of their lender requirements. There are some 100% financing loans out there and interest rates are down to about 4.25%
Some buyers have backed off because they lost out on the $8,000 tax credit. The interesting thing is, rates were 5.5% back when this program was in effect, so by waiting, a buyer would now save $54,612 in interest on a $200,000 loan. Not bad for waiting just a few months.
Will we ever see interest rates this low again? Will we ever see home prices this low again? Will we ever see them this low again together? I think the answer may be No to questions 1 & 2, and definitely NO to #3. Never before have we seen this much buying power in the market, and perhaps this is why home sales are still hanging tough. If you‘re a buyer, their really isn’t a better time to buy than now, and that is a fact!
