Third Quarter Statistical Gains Are Encouraging But Challenges Still Lie Ahead
I am pleased to report the positive momentum which began in the second quarter of this year has continued locally and nationwide into the third quarter of 2009. The statistics in the fourth quarter should show continued improvement over the prior year as the fourth quarter of 2008 was one of the most difficult in recent history.
The statistical gain in unit sales is encouraging and confirms to us that we have reached the bottom of the two year slide in gross sales numbers and are in fact now moving in a positive direction. This is great news!
A thorough analysis of the statistics, however, reveals that the improvements experienced to date are moderate and challenges still lie ahead. Numbers reported on the overall market tell two very different stories. Sales in the lower price ranges, under 250 thousand dollars, are up nationwide and inventory in this price range has been depleted in many markets and is currently at almost normal levels here (6 months of inventory is considered a balanced market). Sales in the moderate to upper price ranges, however, have continued to languish. In fact sales nationwide for price points above 250 thousand are down, significantly. This is also the case for properties over 1 million dollars.
The data contained in this report clearly demonstrates the stark difference in sales and inventory levels by price range. Pricing in the real estate business, like most others, is significantly impacted by supply and demand. In the lower price points, with brisk sales and declining inventory, pricing has stabilized and is in fact on an upward trajectory in many markets. Home sales in the upper tier remain soft with abundant inventory that is moving at a much slower sales pace. As always, pricing is subject to variables such as location, condition, neighborhood desirability, and stability etc. but the underlying economic fundamentals cannot be ignored. In order to move property in today’s competitive environment, it must be well priced, well positioned and aggressively marketed.
Many folks now recognized that now is in fact a great time to buy and are reentering the marketplace. It remains a buyer’s market at present, but sellers who recognize this fact and position their properties accordingly are having success in selling them. At Beverly-Hanks & Associates, our team of highly trained professionals stands ready to assist you in making wise decisions whether buying or selling real estate in this evolving marketplace.
W. Neal Hanks, Jr.
