Two "home sales" stories from this week coming from two different geographic and population density parts of the country bring two different stories. Or do they?
The Northeast Tennessee Association of Realtors went ahead and published statistics which show a decline in local home sales over an 11 county region for June 2013 compared with June 2012, with a sale price decline of more than $9,800. When comparing June 2013 with May 2013 the report showed a 5% decrease in sales.
A few hundred miles northeast, the Philadelphia Office of the Controller issued a report showing an 18.5% increase in area home sales for June 2013 when compared with June 2012. This report went on to list the most "popular" neighborhoods, which were South Philadelphia, Fishtown, and Fairmount.
Same time period, but with results at the opposite end of the spectrum. That tells me these are not "different" stories.
What this means is that it is only a select few neighborhoods and communities that are turning around in terms of sales and pricing.
The latest from Fairfax County (VA) over the same June-to-June period can also be interpreted any one of a number of ways. An agency report claims the number of homes "on the market" throughout the County dropped by more than 15% from June 2012 to June 2013. Yet, the same report shows that the median home price actually increased about 7.5% during that same time.
In this instance, fewer homes on the market is the most likely reason for the price increase. Thus, a possible buyer in that area now has less bargaining power by not being able to show as many lower priced "comps" available in the area. A long-term real estate investor is also less likely to find a bargain to keep until the market returns to past levels.
From a selling standpoint, if hundreds or home owners in Fairfax County now decide to list, it would mean a short-term decrease in the percentage of listings sold, and likely expand the average time that homes are on the market.
Potential buyers and potential sellers have different reasons and motiviations to enter the market. An investor likely sees a sales decrease over the course of a full year as a reason to look elsewhere. A potential "move-in" buyer sees that decline as a reason to come in with lower offers because he/she now knows that it is a tougher sale.
Put all of this together, and what these stories all combine to tell us is that the market is still very much uncertain. That's not how it is supposed to be done.
Places in Time III
4 days ago