Out on a Limb

I expect to see inventory levels creep up in February and the level of activity continue at its present pace. . I hope to see some improvement in the townhome sector compared to January as buyers should take advantage of the stimulus before it is gone and investors continue to pluck off good values that are becoming scarcer by the day. Usually sellers that come on the market in the spring are very optimistic about the market and tend to price higher or pus the market a bit. Appraisals will continue to be a factor so you can only push so far but we will have to see if the market will bear this out. We have been successful in this strategy on homes that "hit on all cylinders" meaning great condition on a great lot. So far we have gotten these appraisals through so knock on wood that this continues. The higher the price range though the tougher that is. We all still need to keep in mind the changes in the financial sector looming on the horizon. The Fed pulling out from buying mortgage-backed securities has to have an impact, and big changes have been proposed for FHA financing which will have an impact if they go through as I think they will. I believe our market is strong enough to work through these challenges but if you do not or simply want to hedge your bets and you are thinking of selling then you need to get on the market quickly. For buyers, you definitely need to act quickly as rate changes can quickly erode your purchasing power. Likewise changes in the qualifying guidelines such as requiring a larger down payment and/or stricter underwriting regulations can take you out of the market completely. As our market continues to unfold I will as usual keep you informed.

Front Lines

2010 started out pretty much as expected. We saw a 10% increase in single family inventory for a total of 34 single family homes on the market and a 31% increase in townhomes coming on the market raising the available inventory to 51; still well below the 2009 January totals of 161 townhomes and 70 single family homes. We saw a 15% increase in the number of sales in the single family sector going from 20 in January '09 to 23 in January 10 but the townhome sales dropped dramatically from 81 last January to only 46 this January. Now keep in mind that we had 161 units on the market last year so part of that is a function of there being so many "good" properties to choose from. "Days On Market" for townhome sales in '08 was 74 and that dropped to 39 in '09 and for January of '10 it was only 20 so that is a positive trend. If there is something good (priced fairly, good condition and good location) it is gone quickly. Similar numbers in the single family sector were 88 DOM in '08, 68 in '09 and 56 this January. (January's number excludes one sale that was 532 DOM home that I felt unfairly skewed that stats.) In other words, January was a good month for real estate and our market is coming out of the gates with a pretty fair amount of activity.