What a welcome home. Yesterday, I was scheduled to fly directly into Newark Airport from Jacksonville. But because of the snow in the Northeast, I changed my plans and flew into DC instead and took a train to Newark instead. My wife kept telling me that we were getting hit hard, but it’s been a while since I’ve seen and driven through 2-3 feet of snow. Wow! And it’s still coming down today so I’m working from home. The good news is that there is something comforting about a snow storm and I’ve been able to sneak a peek at the Olympics and SportsCenter while I stay connected. The bad news is that our mailbox was knocked down by a plow and is buried somewhere.
Just as the snow brought good and not-so good, so did today’s Existing Homes Sales report from the National Association of Realtors. The numbers showed that sales of homes were up 14% over last January which is obviously a positive. Yet NAR reported a 7% decline in sales from December. While January is usually a slow month for home sales, clearly the impact of the federal tax credit for buyers hasn’t had its full impact.
Let’s get back to the positives. Home inventory – the amount of homes for sale in our great country, remained consistent at a 7.8 month supply. We had seen a high of inventory of nearly a year’s worth. We are getting nearer the 6-month mark which is the normal sign of a balanced market where neither seller nor buyer has the advantage. Looking at national numbers, it is fair to say that buyers are in the driver’s seat.
And when it comes to price, NAR reports the median sales price to be about $164,000 which is the same as last January. What we have to remember is that more than 35 percent of sales in January were of “distressed” properties, industry jargon for homes in foreclosure or in short sales. These homes usually sell for less than a traditional property and are therefore dragging down the average price.
So what does all of this mean? I’ll stick to what I have been saying to reporters and in TV interviewers – and to so many others. Now is the smartest time to buy a home in the 35 years I’ve been in real estate. That’s because of I.I.I.P.
I – Interest rates on mortgages. They remain at near historic low levels.
I – Inventory. There are plenty of homes to choose from
I – Incentives. Along with the normal tax benefits, the US government has the tax credit extension and expansion in place through April 30.
P – Prices. In many markets around the nation, home prices have come down.
But remember, real estate is like a weather map. National reports don’t mean much. It is what is happening locally that matters.
I’m going to finish working, shovel a bit and hope we don’t lose power. My Illinois Fightin’ Illini have a big game tomorrow against Minnesota on the Big Ten Network.