We end the year with a good note and begin the new year with good hope.
Closed sales numbers in 2011 were up 4% over 2010. That is good news but the message is actually better than that:
- First, pending sales are up 6% over 2010, and
- Second, virtually all of the good news in 2011 came since September. Perhaps it now can be called a trend (not just a ‘blip’/anomaly).
- Third, last December we saw what in hindsight a blip of good sales; this December we are over 10% stronger on closed sales and almost 20% better on pending sales compared to the last December.
- Fourth, the closed sales numbers in December are the highest of the last 5 years; that is significant!
- Fifth, available inventory continued to drop again this year which is good for stabilizing pricing in the market. That sounds hopeful!
Depreciating values continued at about 7-8% for average and median sales prices. This is a lower but slower decline than the previous 2 years; but still too high. We also know we still have to contend with a continuing supply of distressed sales (defaults, desperation, and short sales) and a backlog of foreclosed (REO/bank owned) properties. We need to correct our way out of this hole.
Anecdotally, the mood in the marketplace is changing. Buyers believe that downside risk of buying now is dramatically reduced; they also believe that the affordability index is perhaps the highest in 40 Years. Contributing to that perception are universally acknowledged low prices (finally), and historically low interest rates (last week 3.89% on 30 yr fixed loan). Many complicating factors in the past such as lenders not willing to lend, or wildly insane appraisals, are less of an issue now. There are also enough positive gains incrementally in the general economy that many believe we are coming out of this slowly. Many believe that to buy today and hold for 2 to 5 years will not result in being penalized.
We do not lack threats to this optimism. In addition to distressed inventory, Europe’s financial condition is not hopeful. There still is no peace in the Middle East, and still no peace to be found in an election year back home.
In recent months our numbers of showings of properties are way up, offers are coming in, and our closings (and our incomes) are up. We are seeing sales in types of properties, and in price ranges, not seen in much too long. We are very busy right now, not just trying to find new business, but serving our clients well. At our recent Bella Casa broker’s meeting there was near universal optimism for 2012. I trust that 2012 will be the best year ever to buy real estate. If that happens then our sellers will also be happy to finally sell and be able to buy extremely attractively as well.
Glad to have your thoughts anytime. Our very best to you and thank you for supporting us while we serve you with everything we have.
RandyRandy McCreith, Principal Broker
Bella Casa Real Estate Group
Cell: 503-310-9147 Fax: 866-281-6653
View or download the full Market Action Report for December 2011.