April Housing Report
Everyone knows April Showers bring May Flowers, but what does that mean for housing? As we’ve already mentioned here and here, there has been a tremendous amount of activity in the housing market lately. After that torrential downpour of of buyers, we are looking at the numbers for April 2012 to see if the market is blooming. For straight answers, we went to our resident market expert, Michael Robinson for a breakdown of what is going on.
1. What are the numbers? What’s happening in the market?
As of April 2012 active inventory was 3,792, a 28.6% decrease from April 2011. There were 747 closings in April 2012, 4.1% less than April 2011. Months of Inventory was 5.1, down from 6.8 in April 2011. Median price of sold homes was $192,000 for the month of April 2012, down just 1.5% from April 2012. Pierce County put 1,368 properties under contract in April 2012, up 12.9% from April 2011.
2. The median homeprice in Pierce County for January was $174,950k , and now it it says it is $192,000. Does that mean home prices are going up?
Someone once said if you have one foot in a bucket of hot coals and the other in a bucket of ice, “on average you should be just fine!” With the Pierce County median price ticking up 9% since January one could easily conclude prices are going up. That said, Pierce County is a big place and median prices vary wildly depending on which city and neighborhood you are looking at. Talk to your Realtor for the median price trends in your community.
3. If inventory is under 6 months, does that mean that we are now in a balanced market?
Under 6 months of inventory sounds like a balanced market with room to grow. On average, the market numbers are getting back to normalcy. That said, one seller’s reality of the market is more likely to depend on how much they owe on their current mortgage and what they’d like to get for it in order to sell.
4. Is there a difference between bank owned and short sale sales prices and fair market sales prices? What does this mean for sellers?
The REO (bank owned) inventory has unemotionally found the market, even created a market, attracting investors of all sorts. These properties are in increasingly short in supply as they draw more and more attention from investors. The supply of REO properties is fully 36% lower than the beginning of the year with only 1.2 months supply at current closing rate. These properties make up only about 11% of the inventory but represent nearly a third of total Pierce County closings.
5. What happens next?
I would describe these “hot and cold” sectors as growing pains as the market heals and works it way back. Eventually and gradually, the REO inventory will not replenish at the fast rate is being absorbed. Eventually and gradually some of the higher end properties will reduce in price to find their market. Eventually the higher end market segment will see greater interest from buyers who start to feel bullish again, the same way investors have focused on REO’s.