By Stetson Lowe
It's funny to me how the media and in this case the Salt Lake Board of Realtors send out this press release that sales were up in February over January. Of course they are, they are every year as any home that sold in January went under contract during the Christmas weeks of December and I don't know to many people that are out house hunting while they are still rocking around the Christmas Tree.
That said I do agree that the $8,000 tax credit did help along with the warming weather to increase sales in February. The two parts of this press release I found the most interesting is that the median home price Salt Lake County has only dropped 8% from its high in June 2007, and that "Based on current sales trends over the past three months, the absorption rate (an indication of how long it would take to sell existing inventory) is 11.9 months" that is not as bad as people think either.
Here is the entire press release for your reading pleasure:
February Home Sales Climb 32 Percent Over January, According to the Salt Lake Board of Realtors
27 March 2009—
The Salt Lake Board of REALTORS said that existing home and condominium sales in Salt Lake County in February climbed 32 percent over January sales. Sales were down 23 percent compared to February 2008. In February there were 584 homes and condos sold, up 32 percent from 444 sales in January. The increase in sales can be partly attributed to an aggressive incentive campaign by the federal government that offers an $8,000 tax credit to first-time home buyers or buyers who have not owned a home in the past three years. “Sales will continue to increase going forward because of record-low mortgage interest rates and a second program that offers a $6,000 state grant for buyers of new homes,” said Ryan Kirkham, president of the Salt Lake Board of REALTORS. “With these incentives and mortgage interest rates below 5 percent, buyers have a tremendous opportunity.” The Federal Reserve’s move last week to buy as much as $300 billion in long-term U.S. Treasury securities pushed down mortgage interest rates – which are bench-marked to Treasury bonds – to below 5 percent. Interest rates could fall as low as 4.5 percent, according to Kelly Matthews, economist at Wells Fargo. The median price of homes and condos sold in February was $224,450, down 3 percent from $231,500 in January, but flat compared to a median price of $224,956 in February 2008. The median sales price of all homes and condos sold in Salt Lake County peaked in June 2007 at $243,500. When compared to February 2009, the median sales price has fallen 8 percent. The median cumulative days on the market to sell a home was 120 days in February, up from 99 days in January and up from 96 days in February 2008. Based on current sales trends over the past three months, the absorption rate (an indication of how long it would take to sell existing inventory) is 11.9 months. End Press Release We are still in the eye of the storm right now but I think we will begin leading out of the storm this year. Anyone who is waiting to buy at "the bottom" will be sorely disappointed when the house they are thinking is going to drop another $20,000 ends up selling out from underneath them for the exact listing price, trust me this will happen, then this same person will go and make another low ball offer on their 2nd choice only to find out that while they were trying to play "hard ball" someone else offered closer to the listing price and had their offer accepted. In essence they will have whiffed, swung and missed at the bottom of the market and will look back and wish they would have moved on their first choice, instead now they are paying more for a home that was not even in their top two choices. Just my prediction. Stetson Lowe - The Mortgage Insider Check my daily rates @ www.utahloantips.com
