August, 2009

We’ll start out in the Northeast, where sales were up 15% in the second quarter, compared to the first. Overall however, the numbers are still down compared to a year ago, both in sales volume and price.

But looking at individual states, New York in the second quarter was up more than 22%! In fact, Elmira, New York experienced a median price increase of more than 11% compared to last year. Buffalo, Niagara Falls and Syracuse also experienced price gains, so things are certainly looking up in New York!

Moving on to the South, existing home sales in the second quarter jumped 3.9%. Overall, prices were down, but there were some bright spots! The Cumberland area of Maryland and West Virginia saw price increases of nearly 22% in the second quarter of 2009, compared to a year ago! In Beaumont-Port Arthur, Texas prices increased 11% over last year; and we also saw price jumps in Jackson, Mississippi; and the Shreveport-Bossier City area of Louisiana.

And in the Midwest? Existing sales were up 3.2% in the second quarter. Prices, and the rate of sales were down compared to a year ago, but not in the Davenport, Moline, Rock Island area of Illinois and Iowa, where prices increased more than 30% compared to a year ago! Price gains were also seen in Springfield, Illinois, Topeka Kansas and Bismarck, North Dakota.

In the West, there was some great news and some not-so-great news. First of all, looking at individual states, the biggest quarterly gains of all was in Idaho, where sales were up 67.5% in the second quarter over the first quarter of this year! And, Hawaii was a top producer – with sales quarter to quarter up 24.2%! But overall in this region, quarterly sales were down 2.3% compared to the first quarter of 2009, but compared to the second quarter of last year? Sales rose more than eleven percent!

Looking at the big picture, the quarterly existing sales are up in most areas, and in many areas, prices down. But, we are seeing many markets that are bucking that trend — places where sales, and prices are up!

Let’s start by looking at what all these housing indicators mean to the homeowner.

If you own a home, and you’re going to stay in your house for many years to come, and if you can comfortably afford your mortgage, and you don’t have one of those adjustable mortgages that might be ticking upwards in a year or so, and if you’re confident you’ll be staying employed?

Then whether the numbers are up, down, or in between, you’re OK.

In fact, the only thing that might have a direct impact on you, is whether home values in your neighborhood cause your property taxes to go up, or down. That’s a variable that you’re going to want to watch very closely.

Now – let’s look at the numbers from a seller’s perspective.

The higher sales numbers mean you have a better chance of selling your house! Moving on, and starting over is a lot easier to do when properties are moving than when the market is slow. Which means you’ll have a better chance of being successful in your home sale. These numbers also show that more and more distressed properties are getting swept away, and with fewer short sales and foreclosures available, your competition is more likely to be a traditional house, not an under-priced distress sale.

Also, as inventory of distressed properties gets cleared out, fewer short sales and foreclosures will be available as comparable sales for appraisers. This means that the appraised value of your place may go up!

With prices down in many areas of the country, you might get less at the settlement table than you would have if you sold during the peak a few years back. But, if you bought your house before the boom, your value probably shot way up, perhaps 100% or more, when real estate was going through the roof, and now…if it’s come down ten, twenty…even forty percent? You’re still ahead.

And if you sold at the top of the market back then, and bought a new home? That home would have been at the top of the market too — you would have sold high…and bought high.

But of course, if you bought at the peak, 3 or 4 years ago, and you need to sell now? You are probably going to take a huge hit. If you need to sell, you might need to do a short sale, which will hurt your credit score.

And finally…what do all these ‘Up’ indicators mean to buyers?

Well, they mean that more and more people are getting serious, and buying a home. It’s still a buyer’s market — you will find many prices are low, and in some markets, very low! And, that’s good for you.

But as the latest reports show, we’re seeing price gains in some markets. And in places like upstate New York, Idaho, and parts of Texas, the bargain basement pricing is over – properties in these areas are increasing in value.

We’re seeing the return of competitive bidding as well, which means multiple contracts on some properties. It’s not happening everywhere, but it is happening.

Additionally, fewer home sales are for distressed properties, so you might not have as many short sales or foreclosures to pick from.

And as a buyer, here’s one more thing to look for: As we get closer and closer to the deadline for that $8000 tax credit? It’s a good bet that more and more buyers will be getting serious — the competition may really get intense. Especially by the end of September, and into October.

So even though it is still a buyer’s market for now, as time passes, buyers might find they have somewhat less to choose from, and somewhat more competition for those properties still available.

Whether you’re buying, selling, or staying put — the numbers are important to you.

You will probably notice, when Existing Home Sales and Pending Home Sales, and other housing reports go up, the economy reacts in a big way. Those numbers have the power to move the markets, both here at home and abroad.

Clearly, buying one house won’t make the stock market go up, but if you buy during a month when hundreds of thousands of others are also buying, this pushes the sales numbers up, and the markets quite often react based on that news: you and your home are a part of that.

Economists also talk about something called ‘the multiplier effect.’ For example, a home that costs just under two hundred thousand dollars is estimated to help generate over $63,000 to the local and national economy! How is that possible? Well, let’s start by looking around the settlement table. Because of your purchase, the sellers were successful in the sale of their house. Now, they might now be able to go and buy another house! And the ‘Up!’ cycle continues.

Your title attorney will get a paycheck, and so will the receptionist sitting out front. As will the processor, and the people who do the title search. Thanks to your home purchase, they all get paid.

Also, your real estate agent, and the seller’s real estate agent get paid, too, as will their brokers, and their office managers, and even the guy who installs those ‘for sale’ signs out front. And, unless you paid all cash, your lender will get a paycheck too. So will their underwriters, and their appraisers. So everyone around that table is getting a paycheck — thanks to the fact that you’re buying a house.

Plus! You’ll need to move… and that means hiring movers, and probably buying some new things too! In fact, most people who move into their next home buy at least some new furniture — using that $200,000 home as an example, most people will buy about $5000 worth of new furniture. That helps keep that furniture store open. Provides the salesperson there a paycheck, and the owner too. And, it even helps to keep the factory where all that furniture was made open.

So while one home purchase won’t move the markets, when there are many, it adds up — it’s good for the economy — and, it’s good for America.