Nationwide Uptick Tells Only Part of the Story

NAR’s report for May shows a nationwide uptick in the sale of existing homes and sited favorable affordability conditions and the first time buyer tax credit as the primary reasons:

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Read the full article here.

It is encouraging to see the continued trend – the first nationwide back-to-back monthly gain since September 2005 – and Michael Saunders & Company recently posted our own area trend report for Sarasota, Manatee and Charlotte counties. Unfortunately, month to month reports only tell a piece of the story.

To get a clearer picture, it helps to look back over a period of time. When we look at the Sarasota market over the last 2 years the following patterns emerge:

Sarasota 2 Year View

Sarasota 2 Year View

  • Inventory levels down -39.6% from 13,090 properties available for sale in May 2007 to 7,907 in May 2009.
  • Sales up 24.7% from 579 sales in May 2007 to 722 in May 2009.
  • Pending sales up 95.7% from 532 in May 2007 to 1041 in May 2009.

This is great news and indicative of a bottoming and recovering housing market. We have previously reported the steady drop of inventory to more normal conditions; when we look at the increased sales figures, we see broad market conditions off of the life support of the last couple of years.

Most illuminating of all – if you are a seller – is what it will take to sell your house. From May 2007 to May 2009, the price at which homes were listed in Sarasota dropped, on average only -3.8% from an average of $578,000 to $556,000. On the other hand, the homes which sold dropped -43.2% during this same period, from an average of $423,000 to $240,000:

sarasota_priceforsale_v_sold

Sarasota 2 Year View For Sale vs Sold

Note the green and red lines in the chart above. If your home was or is listed for sale and has not yet sold it is most likely a result of a lack of convergence of these two figures. Are you a have-to-sell or a want-to-sell? Either way, you increase the likelihood of a positive selling experience if you listen to the market condition and price your home correctly from the outset.

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