Most media reports are stating that home sales declined in the month of August. What the media is not reporting is that it is not uncommon for home sales to dip in August. Compared on a month to month basis, a seasonality does exist in the reporting of home sales. People prepare for back to school, vacations are taken and August is just plain hot.
The bottom is not falling out of the housing market.
Considering the fact that unit sales did decline from July to August, the flip side is the median price rose significantly. Up over $50,000 to $570,000 form July’s $516,800. Plus the median price has increased every month this year. So, despite the fact that unit sales decreased from 104 units last month to 83 units in August (-20%) it is hardly cause for concern.
You have probably seen some of the newer units around town which are finally beginning to grab consumers attention This segment of the housing market which has been on the doldrums for quite sometime even surpassed the single family market and had a slight increase in the median price in a year over year comparison.
Homes in Escrow
Homes under contract are still at very high levels while the number of homes available for sale continues to decline. The 4th quarter does not typically see a lot of homes coming on the market. If home sales remain strong, we could even see a shortage of homes for sale. Also the housing stimulus targeted at first time home buyers is set to expire November 30. There is speculation that Congress will extend the benefits or even increase them to include a wider home buying public, not just first timers. Lastly, it appears that the Federal Reserve will attempt to keep interest rates low into the first quarter of 2010.
There seemed to be much speculation that the early positive results we were seeing in real estate were built upon a house of cards. It certainly appears to have a stronger foundation than many us initially thought.