Out on a Limb

As we go into May I expet changes to come to our market. those sellers that are in a "have to sell" situation will see the summer market looming as Memorial Day approaches and they will realize they're missing the spring market. I expect them to get more aggressive in their pricing. The activity level in May will dictate how early it starts and how aggressive they have to price to get out in front of the market. If the level of activity we saw in April continues then we should be fine; but; if that was the extent of the rlo bubble we typically see, then we will not be. My opinion is that as consumer confidence comes back a bit we will see those fence sitters get into the market. Our stats LOCALLY are great with good employment numbers, good wage numbers and a slow but steady improvement in housing prices. Relocation may be a bit stagnant as they are held back by the real estate market in their part of the country as well as being incluenced by that area's market. It takes a bit of time for them to realize that they are not in Kansas anymore and our market is safer and more dynamic than "back home". The short sale market is very active and we are seeing the bank processes improve...finally! Each bank is different but we took one from contract to close in just 63 days already this year. Negotiation on these short sales represent about 15-20% of our business and, knock on wood, we have a 100% success rate! Ok, the short answer to what I see in the next 30-90 days, the upper end of the market will stay steady and it has been good so far this year. The below $400,000 market will also continue to go strong and should actually improve. The middle of the market place will see average activity and hopefully an increase as confidence comes back a bit. Homes that have been on the market 30+ days, homes that have an impacted lot or a condition issue with motivated sellers will adjust their pricing down. I do not expect to see rates move dramatically in the short term but we are continuing to see new requirements and restrictions coming out affecting affordability. As we head into the summer months we typically see inventory start to decline and we typically get a little bubble of activity as relocation procrastinators rush to get in before school starts. As the market continues to unfold I will, as usual, keep you informed.

Front Lines

The spring market thus far has certainly kept us guessing. January & February gave every indication that the market was poised to take off but then Mach fizzled. April's numbers picked up again but are still not where we hoped they would be. The number of available townhomes continued to drop from 72 in March to 58 in April. the bad news is that the number of properties coming under contract dropped as well from 81 to 64. (Compare that to the 123 we sold last April due to the stimulus incentives!) The average Days on the Market also continued to improve dropping to 29 in April from 39 in March and 48 in February! So, while the number of contracts dropped, the inventory and days on the market continued its decline which is positive overall. The single family sector actually went the other way with inventory continuing to increase substantially to 65 in April from 50 in March and 37 in February. The good news is that the number of contracts came back from March's dismal 27 to 39 in April. Given that, march and April are the big months of our spring market. This is not the best but it is an improvement. Our market could be languishing for many reasons; the turmoil in the Middle East, gas prices, uncertainty over the budget or just because we have not been able to string two days of nice weather together over a weekend. Any or all of the reasons or something I am not even aware of could be the issue but the root of the problem is consumer confidence. Buyers are scared to make a decision and they are plucking off the exceptional values or the exceptional properties and sometimes even those are sitting. Decisions can only be delayed for so long and those that are suffering from the paralysis of analysis will wind up missing the best our market has to offer. The number of foreclosures as a percentage of available inventory has continued to drop. The number of short sales has increased although overall the percentage of distressed properties has fallen. Hopefully in May we will see the increased activity of April at least continue. I will as usual keep you informed as our market continues to unfold.