Thursday, August 26, 2010

There Is Good News on Home Sales in The Triangle

Let’s be upfront here. The July numbers on home sales in the area were a disappointment at best. With home sales down 33 percent in Durham, Johnston, Orange and Wake counties last month, pending sales down almost the same amount, showings down 23 percent and listings for existing homes at their highest level in four years, the news has been discouraging.

But this news must be viewed in perspective. As challenging as these figures are, keep in mind the following:

• This is not a unique situation for our market. The National Association of REALTORS has announced that sales of previously occupied homes in the United States fell 27 percent in July, the weakest showing in 15 years and the largest monthly drop since it has kept records of national sales in 1968. We have to remember that a large number of buyers took advantage of the Federal Tax Credit and purchased homes in the first half of the year, which lead to this drop.

• Lawrence Yun, Chief Economist for the National Association of REALTORS, stated: “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs”

• “Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place this in perspective, annual sales averaged 4.9 million a year in the past 20 years, and 4.4 million over the past 30 years,” Yun stated.

• Home sales year-to-date in the Triangle are still 9% ahead of the same time last year.

• The average sales price for a home in the Triangle last month was a healthy $226.800, which is the third highest year in the past 15 years. While averages are not indicative of price movement for specific houses, they do indicate that more money on average went into residential real estate this July versus last July. It’s also up considerably from the national median sale price of $182,600.

• It is still a great time to buy a house, even now that federal tax breaks for owning a new home have expired. The average rate for a 30-year fixed mortgage is at 4.42 percent, the lowest in decades. Your clients should know that with all signs pointing to an eventual increase in price, not to mention expected growth in the Triangle, this is the best time for them to purchase a house at an affordable rate.

Most importantly, as financial analyst Alexis Glick said on Good Morning America on Aug. 25, “At the end of the day, the home is your long-term investment, if you’re willing to stay in that home for 5, 10, 15 years and view it as a long-term investment." You and your customers need to think of real estate as a long-term investment, and in the end, it will pay off for everyone. It always has, even in challenging economic times like these.

1 comment:

  1. I'm convinced that this just further supports the efforts of Realtor s to sharpen their skills and educate the public. We are fortunate to be in the market we re in.