Annual Sales Snapshot – Very Strong Start in 2010!
A strong 4th quarter of 2009 saved the year from being a truly dismal one for home sellers.
By the end of the first half of ’09, the number of homes on the market had increased by 40% from the same period a year earlier while sales volume was down by 20%. Median sales prices had dropped by 15-20% from the previous year and were falling.
But, by the beginning of the 4th quarter the trend reversed.
We believe two factors caused the 4th quarter to rebound.
First, consumer confidence improved. Buyers were more inclined to commit to a home purchase. Second, a significant number of sellers decided to wait until the spring of 2010 to market their homes.
Those two factors combined to cause a shift in the supply/demand ratio: there were more buyers and fewer sellers. As a result, multiple offers and over-bidding became commonplace once again.
Although the strong year-end surge didn’t entirely make up for the decline in home values of the previous three quarters, it certainly set the stage for a very strong start in 2010.
SELLERS HOLD THE KEY TO THE HOUSING MARKET
Will home sellers who chose not to sell in ’09 flood the market in ’10, causing the supply/demand balance to shift back in favor of buyers? This is the question of the New Year!
Buyers will certainly be motivated as interest rates begin to edge upward. Will sellers be as motivated when the press starts to broadcast these 4th quarter numbers? Or will they decide to wait for values to continue to improve? We’re betting that Q1 will be a good one for sellers.
ADVICE FOR SELLERS
Yes, buyers are motivated now, but we have concerns for later in 2010 due to rising interest rates. Accurate pricing is still extremely important- you do not want your home to sit unsold. Pre-sale planning and home preparation will certainly pay off handsomely. The sooner you start the process the easier it will be.
ADVICE FOR BUYERS
Interest rates will soon rise. How high? No one knows. Plus, home values in our area are stabilizing and are likely to rise. Although selection is very limited at the moment, buying soon and locking in a low 30-year fixed rate mortgage will most likely prove to be exceptionally profitable. One’s particular buying strategy, home selection, and holding long-term are always critical to success.
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