Out on a Limb

We did see the downward pressure on pricing come about in May that we had expected, especially in the single family sector but the overall market rebounded nicely in June.  As the spring market ends and the summer market begins this is normal, as those sellers that have to sell but have not sold start to get more aggressive in their pricing.  They do not want to miss the summer market as they missed the spring market.  It hits the single family market a little harder because they have more inventory that is taking longer to sell and because their typical buyer is more impacted by schools.  Typical cycle is that we see appreciation in the spring and then we give some back in the last couple of quarters.  As long as we do not lose more than we gained we have appreciation for the year overall.  For buyers the trade off is that there is more to choose from in the spring of the year and the good ones go fast.  We are seeing lots of “tire kickers” out there in the market with little sense of urgency and waiting for just the right deal.  Once they find it there is usually competition.  The under 300,000 market or townhomes and under 450,000 or so for single family homes is very, very active and multiple contracts are quite common on the best properties.   I expect to see the townhome market continue along at the same pace with inventory creeping up slowly.  With over 45 days worth of inventory on the market,  the single family sector is a little more precarious.  The number to watch is new inventory coming on the market.  The sales per month have been very consistent over the past 5-6 years and there is no reason for that to not continue but the number of new listings coming on per month can change that absorption rate quickly.  In April, 54 homes came on vs. 48 in April 2011 and in May, 48 came on vs.  46 in May of 2011.  Small increases but increases none the less.  I am hoping to see it trend downward. That being said inventory is well below last year’s numbers and there is demand as of this writing.  I do think as the election year rhetoric increases and it affects other economic indictors that we will see consumer confidence subside a bit.  I look for the year overall to end up higher than last year but I do expect to see the second half of the year slow down a bit.  As our market continues to unfold I will, as usual, keep you informed.