Front Lines

Once the snow melted the market heated up pretty quickly. March built on February's numbers and while inventory grew a little in March, sales surged keeping active listings below '09 levels. As of March 31st, there were 56 townhomes available, up 10% from 51 in February but down 51% from January '09's 109 active listings. A far cry from the 315 active listings in March of '08. The single family sector saw similar numbers with 54 active listings as of March 31st, up 50% from 36 in February but down 61% from March of last year's 87 active listings and well below the 146 of March of '08. Townhome sales bumped up 62% with 115 sales from February's total of 71 but stayed consistent compared to 110 sales in March of '09 but still well above 56 in March of '08. There was a notable jump in the single family sector with 53 sales, up 89% from February's 28 and a 39% improvement over the 38 sales in March of '09. Sales more than doubled March of '08's 24 sales. This is outstanding news but not entirely unexpected and right in line with what we have discussed in our most recent Out on a Limb. The townhome market has been improving steadily now for 19 months with inventory steadily dropping and sales well above '06-'08 levels. Many segments of the townhome market have seen 12-15% appreciation over the bottom of the market a year ago. The real good news is that this has finally moved into the single-family sector in the past 4-6 weeks. I attribute this to owner occupied townhome sellers finally being able to move up and buy a larger home. This has been missing from our market for a number of years and finally we have seen an impact. With each passing day and small bits of good economic news consumer confidence has risen as well giving relocation buyers the desire to own as opposed to renting. There has been pent up demand to buy a larger home and it is finally starting to be released. Interest rates have risen only slightly, which is a surprise to me but a good one. I had expected a more substantial jump once the Fed pulled out of the mortgage backed securities business but that has not happened...yet. I still think it will at some point but clearly I called it wrong thinking we would see a more substantial jump in rates by now. The stimulus plan ends in April and I feel that will have some effect on the townhome market but I do not think that it will be as significant as some do and certainly not have the impact that a rise in interest rates will.

Out on a Limb

I look for April to continue in the same way that March did. New inventory coming on and strong sales continuing, keeping inventory levels low. That being said some of the pent up demand has been sated and April is always a big month for new inventory to come on the market so I feel that the townhome market will stay the same but we will see some increase in the available single family properties for sale. Townhomes will stay the same, as those that are motivated by the stimulus plan are rushing to buy before the plan ends on April 30th. There is not that kind of drive in the singe family market but move ups will continue to bolster sales there compared to previous years. It will be interesting to see if May continues the same way. I expect townhome sales to slow a tad but for the most part stay status quo. I look for our foreclosure listings to increase a bit as well. Competition in the single-family sector will be fierce as those that "have to sell" start aggressive adjustments in May realizing that the spring market is all but over. This will level out some of the frenzy from March and we may even see a slight pull back. That being said our market is strong, sales will continue, good homes on good lots in good condition will sell. As our market continues to unfold I will as usual keep you informed.