The National Association of Realtors just released the housing numbers for September. Believe it or not, there is actually some good news. Seasonally adjusted, national sales of homes improved and were sold at an annual rate of 5.18 million. This is above the 4.9 rate that we had seen this summer. This rate is up 5.5%, which is great news. The reason that we are finding ‘a floor’ on the volume of sales is that we are finally moving from attractive prices to compelling prices. The average price moved from $210,500 in September of 2007 to $191,600 September of 2008. This is a drop of 9.0%
One of the main reasons for this significant drop is the mix of houses being sold. A significant portion of homes being sold are ‘REO’s” (Real Estate Owned, by banks, typically foreclosed) and short sale. If 1 in 4 or 5 houses fit in the distressed category, price will come down. Obviously this is what has happened in Rhode Island. But the result of lower prices has been an increase in the pending index of homes in the Ocean State. In 2008, the number of house pending increased by 9% over September of 2007. This is also encouraging news.
One other really important fact in the report is that over 80% of the purchases in September were owner occupied. This is a much higher than normal percentage.
This means that the people buying are purchasing for shelter and will in fact occupy the home. This is a strong stabilizing trend. It also suggests that these buyers will be re creating neighborhoods and taking better care of their properties.
What is also absolutely apparent is that the numbers range broadly across the country and here in Rhode Island. We tend to look at the national numbers and assume they apply directly to our city/town and or neighborhood. This is not the case. As all real estate is local, you need to look at the data for your immediate area to really know what is going on. A Realtor can provide the data and the analysis. Get the advice. The real estate rule which has been: location, location, location is now “all real estate is local.”
To Recap:
What do the number mean?
There is a floor for the number of houses sold just over 5 million nationally.
Prices are still correcting.
Inventory is dropping which will help stabilize the price.
1 in 4/5 Houses in Rhode Island is a foreclosure or a short sale.
Most buyers are in the market to buy a home to occupy for them selves.
Buyer Purpose for buying: shelter.
We really are in a global economy.
Yet all Real Estate is LOCAL.
