The first quarter came to an end a couple of weeks ago which means we have a bit more data to work with regarding home sales. I know some of you are armed with tax return checks and wondering if it might be time to dive into the real estate market. So here’s my opinion…
See my pretty lines? The closer they are together the better the market is doing in terms of supply and demand. We call that number inventory. If they are closer it means that the volume of houses entering the market is closer to the demand of the market. As you can see the first quarter of this year was pretty much on par with last year. This is nice to see as we are seeing a decrease in inventory. This is important for a healthy, normal market. We aren’t there yet, but at least things are starting to bottom out.
The reason buyers are coming out, of course, is the ongoing home price declines. We are at the point for many people where buying a home is equivalent to renting a house. Renting a house for $1,000-$1100 a month? We can get you a house for that now. Low interest rates coupled with huge declines in home prices has made this happen. Buyers are starting to figure this out and are coming out to consider buying. The rate of home price decline has slowed down, but the decline is still happening.
A buyer prospect recently asked me what I thought of the current market. I said if 2009 was a 1, because I’m telling you that year stunk in real estate, then we are at a 3. We are clawing our way out of the hole, but we are still in it.