If you are a Realtor, home buyer, seller, or just have a heartbeat you will probably be involved in a conversation at some point today that involves the question, Has The Market Bottomed Out? I believe it hasn’t but the latest report from The Pinellas Realtor Organization suggests it may have. First, the argument for the market having bottomed out.
Home sales through March of 09 are up 18.1% since the same time last year.
There have been 1,422 sales so far in 2009 compared to 1,204 through the same period last year.
Unit sales have increased an average of 18% per month since December 08. However, they also increased during the first six months of last year only to decrease slightly after that.
The median price home as of March of 09 is $140,000 down 22.2% from the same time last year. However, it is up 13% since January 09. This only means that there have been more higher-end sales through March of 09. Case in point, there have been 20 properties sold over $1,000,000 since January this year.
Now, for the argument for the possibility that we haven’t seen the bottom yet.
Thanks to our government efforts to fix or stall our housing crisis we have seen a fraction of the foreclosures still to hit the market.
The government bail-out program only affects 5% of the people behind on their mortgage payments. Even if only 50% of the people who are behind on their mortgage payments end up losing their homes to foreclosure it can only hurt values.
The current absorption Rate is 7.7% up from 6.0% last month but the rate also increased during the first six months of last year only to decrease after that. So, are we truly seeing a brighter market or just the natural ebb and flow of the market? By the way, the absorption rate last June was also above 7% and the market has continued to drop since then.
The average (mean) value for homes increased from $191,000 in January 09 to $199,300 in February but then decreased to $198,200 in March.
So I do not think we have reached the bottom and probably will not until we see absorption ratios above 15% on a steady basis. By definition according to The National Association Of Realtors, a supply and demand of 6 months or more is a buyer’s market and an absorption rate of less than 10% is a 10-month plus supply of inventory. On the flip side, this doesn’t mean people should not be investing in Real Estate right now. It is always a good time to buy.