Spring Has Sprung!

Well, the market has definitely been busy over the last few weeks as buyers scramble to get under contract by April 30th to qualify for the first time buyer home credit and move up buyer credit. With prices down in most areas 20% or more from the high of mid 2007, the combination of attractive pricing, historically low interest rates (which will be going up), a healthy inventory of homes to choose from and the tax credit are all creating somewhat of a frenzy. The homes that are attracting buyers and selling within a few days or weeks are the ones attractively priced; well maintained and updated in desirable locations. Pending sales for March were up 51% from this time a year ago. We haven’t seen numbers like that since 2005.
While homes priced under $500,000 are flying off the shelves, homes over $1M have reported strong activity as well. Last month, 91 homes (76 in King County) sold for a $1 million or more versus 12 months ago 40 homes sold with a $1 million or more price tag. Currently in the Redmond area there is a 2.8 month absorption rate for homes priced under $750,000 and 6.8 months for homes priced $1 million or more. In Woodinville, the months’ supply of inventory in the under $750,000 range is 5.1 and 11.8 for over $1 million. Anything in the 5-7 month range is considered a balanced market and lower than 5 months is a ‘hot’ market favoring sellers.
While the rate of homes selling is under momentum at present, the prices do not appear to be strengthening but hopefully stabilizing as sellers get realistic about their current homes value and adjust the price accordingly. It seems the general consensus that it will be years, probably 5-7, before we see any upward movement in values. No one can predict how long this surge will last and interest rates will most surely rise in the not too distant future now that the artificial prop of the mortgage backed securities is over. We are still are faced with 9.7% unemployment and the number of homes in pre-foreclosure is staggering; all factors that will continue to weigh on prices.
Please feel free to contact me regarding your specific market sector or your personal residence.
Comments and criticisms welcome!