Where Have All The Buyers Gone?
By Karen Schlosser
A simple tax credit of $8,000 caused a rush of people to come into the market and buy a house. Interesting. Is there no more compelling reason to buy a house than a credit? What did they do with the credit? Spend it on the new house? Spend it on something they wouldn’t otherwise have purchased…let’s say something frivolous? Save it? Invest it? Did they appreciate receiving it? What is $8,000 in the scope of things? If you save it, It is $22 per day for a year or $22 per month for 30 years (the life of most mortgage loans). If you mortgaged it, it is about $40 per month for a 30-year loan at 4.5%, an available rate today…unbelievable. If you were to use it as a downpayment, you would be purchasing a $228,500 home using FHA financing. (3.5% is the minimum down payment required by FHA which can be obtained by a gift, primarily restricted to coming from a relative of the borrower. Apparently the tax credit was significant enough that people do not feel compelled to buy a home. Or, is it that they are not aware of the current market conditions and benefits of owning a home? Do they know that interest rates are at historic lows and continue to go down? Do they know there is a large selection of housing available today at extremely affordable prices? Have you told the people you know these facts? The market statistics for August reflect that buyers are unaware of the fabulous market conditions to buy. Look for yourself. Unit sales for August were 1,327, a level we haven’t seen since 1991-92 and a 27% decrease from August 2009. Inventory is headed back up, climbing to 14,985 units which is a 9% increase over last August. Housing Supply is at 11.3 months, a tad down from July but up by almost 4 months from August 2009. Up from August last year by about 6% is the average sales price. Are housing prices climbing? No, higher priced homes are selling. Just look at the market over $1M, 4-6 months ago there were 11 sales, within the past 3 months there were twice as many, 22; although sales are up, so is housing inventory by almost 30%...significant.
Year-to-date is still looking pretty good, sales are just shy of 2009 YTD, sales volume is up a little, but don’t forget the housing inventory is continuing on the upward swing. Your mission? Find the buyers…tell everyone you know about the favorable market conditions that continue to make it an incredible time to buy, perhaps even more than before there was a tax credit. Here’s a link to help you convey the message, from the National Association of REALTORS: First-Time Home Buyer's Basics. Although titled “first-time”, it’s great information for all about buying a house. Remember, people don’t buy houses every day and may need reminders of the steps from their most valuable resource…you. Copyright© Karen Schlosser September 23, 2010
Published on Sep 24, 2010
A synopsis of the real estate market for the month of August 2010 and year-to-date, sales,, dollar volume of sales, inventory, housing suppl...