Taken from Mr. Chips School Of Real Estate Bulletin...

June was a good month. Not as good as June 2008, but much better than the early part of 2009.

Though there is not definitive information (yet), there are signs that the first quarter may have been the “bottom” for our local real estate market:

-Unit sales in the resale market showed signs of catching up to last year’s numbers

-Inventory leveled off in July (normally it doesn’t plateau until late in the year)

-Average prices dropped less in the second quarter than they dropped in the first quarter.

Unit sales were dismal over the winter: January 2009 closed 70% of the units of January 2008 (and 2008 was a year when units were off by more than 20% from 2007). However, with the exception of April, units are getting closer to last year’s totals.

For the Philadelphia area, units closed in June 2009 were 90% of units closed in June 2008. If this trend continues, we may meet or exceed last year’s unit sales (on a month-to-month comparison) before the year is out. This happened in Berks County, where more residential resale properties sold in June 2009 than in June 2008.

The other counties around Philadelphia (Bucks, Chester, Delaware, Montgomery and Philadelphia counties in PA; and Burlington, Camden, Gloucester and Mercer in NJ) have not recovered as much ground as Berks County, but the signs are more encouraging than they were last month. Price is still an issue (comparing 2009 to 2008, the average price was down by more than 7% in the area), but if unit sales maintain their momentum, and inventory starts to shrink . . . are we trying to turn away from the darkest days of the local housing recession? Time will tell!

The spring market had help from low interest rates (5%), and from buyers’ increasing knowledge of the $8,000 tax credit. Interest rates have crept up since then, but many first-time buyers remain intrigued by the concept of a few months free rent in the form of a big tax credit next year.

Short sales and REOs continue to be a nagging part of the marketplace, and they may affect inventory and pricing over the next few months. There are always “better days ahead,” but it’s nice to have a hint that the darkest days may be behind us.

 

 

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