As you can see from the first chart above, Position Realty Market Index, the first time home buyer tax credit created a great deal of demand in the market similar to the real estate boom from 2004 to 2006. Currently the number of transactions is slowing down due to the lack of inventory but real estate price are continuing to increase.
Since August 2012 (12 months ago), the average sold price has increased approximately +22.9% (down from last month), the average days on market have decreased approximately -6% (up from last month) and the number of transaction has increased approximately +10.4% (up from last month). The current average sold price is $239,000 (down -0.1% from last month) which is back to the average sold price experienced in 2008. Since January 2013, the number of transaction is up approximately +39.4% and the number of transactions are expected to increase as we enter the fall home buying season.
The volume of REO purchases since August 2012 has decreased approximately -31% and the volume of short sales have decreased approximately -56%. The volume of REO purchases are shrinking due the increase in real estate prices, more banks are accepting short sale transaction as opposed to foreclosure and an existing supply of inventory is getting purchased at a faster rate.
Since the August 2012 (12 months ago), the number of homes for sale on the market have been fairly stable with approximately a +0.9% increase. Since last month, the number of home for sale on the market have increased approximately +3.8%. As real estate prices increase, more and more sellers that purchased during the real estate boom are putting their homes on the market to break-even or sell with a small amount of equity. The inventory of active homes is consistently being replenished but purchase prices continue to increase.
As more and more buyers enter the market and as more of the supply of residential homes are exhausted, real estate prices will continue to increase at a faster rate (lack of supply and strong demand causes prices to increase).Real estate prices are still at an all time low (near 2008 prices), mortgage rates are still at a historical low and the market is improving both in terms of prices and the overall economy. Time to buy is NOW!! Give us a call to discuss your best buying strategy, TODAY!!