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 are down since 2008 and as a result there is an increase in inventory because the number of listings is not being purchased at a fast enough rate.
Since October 2013 (12 months ago), the average sold price has decreased approximately -3.5% (down from last month), the average days on market have increased approximately +31.3% (up from last month) and the number of transaction has increased approximately 6.1% (down from last month). Since the month of October 2013 the average sold price has teeter tottered up and down with no upward trend. This is good news since the market has not formed a downward trend. We will not see an indication of a market reversal until there have been two to three consecutive months of upward or downward pressure on the average sold price, DOM and number of transactions. The current average sold price is approximately $245,000 which is unchanged from last month.
The volume of foreclosure purchases since October 2013 (12 months ago) has decreased approximately -8.0% and the volume of short sales have decreased approximately -54.3%. Since October 2013 the volume of foreclosure purchases went up the beginning of the year and now the trend is back downward. Since August 2013 the volume of short sale purchases have consistently decreased because the inventory of homes “up-side-down” have been exhausted and values have risen to a point where consumers can break-even or sell with some equity.
Since October 2013 (12 months ago), the number of homes for sale on the market have increased approximately +4.1%. This increase in the number of listings is caused by investors leaving the market and 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. During the month of October the number of homes for sale has decreased from 26,076 homes to 25,960 homes or a decrease of approximately -0.4%. This decrease in the number of homes for sale is expected as we enter the holiday season and is normal for the market.
As more and more sellers enter the market and as more of the supply of residential homes increase, real estate prices may start to decrease (more supply and weaker demand causes prices to decrease).Real estate prices are still relatively low (near 2008 prices), mortgage rates are still at a historical low and the macroeconomic market is improving both in terms of prices and the overall economy. Give us a call to discuss your best buying strategy, TODAY!!