Home Sales Up Again in January
Wednesday, March 10th, 2010 | Home Buying, Home Selling, Market News
Home sales continued their move upward in January. Dane County reported 183 single family and condo sales in January, compared to 151 during January of 2009, an increase of 21%. While this sounds great, there are caveats. It’s down 18% from January of 2008, and down 45% from 2007. So, while improvement is good, we still have a way to go before we see the activity levels we were used to even a couple years ago. Furthermore, the picture is hugely confused by the effect of the federal government’s homebuyer tax credit. Closings spiked in November of 2009 when it was believed the first time credit was about to expire. December closings then plunged to levels similar to a year ago. While January sales improved a little, they were still somewhat subdued. The good news is that offer activity has picked up considerably, in part because we’re heading into the spring market, but also no doubt because the credit was extended to cover offers written by April 30 and closed by June 30 of 2010. It was also expanded to include current homeowners with some restrictions. So, we can expect feverish offer activity through April, and solid closing activity through June. The question then will be, will activity fall again, like it did in December? Only time will tell. We don’t believe there is any chance the credit will be extended again, and that is probably a good thing. The market needs to learn to stand on its own, and the distortions caused by the credit are making it difficult to assess what the true underlying level of demand really is. Our hope is that inventories, which are already getting short in the lower price ranges, will diminish through the period of high activity to the point where the market can continue on its own at a reasonable pace for the balance of the year. For now, we have to be content with the fact that activity is up, and there seems little chance that we will not exceed 2009 when all is said and done. Look for more improvement in 2011
