MiamiRealEstateKing

Dow Up on Home Sales 3rd Consecutive Up Month News – Did You Miss the Bottom?

In First-Time Buyer, forclosure, foreclosure, home sellers, miami, miami beach, mortgage, real estate on July 23, 2009 at 7:48 pm

The Associated Press published an article today (Dow tops 9,000 as home sales rise for 3rd month), where they may be telling the tale of a perceived bottom. This, is precisely why it is nearly impossible to time the top (as many painfully learned), or the bottom.

While many still wait for home prices to finish dropping, smart buyers are out en-force, getting qualified for loans, making offers and yes…even closing on home purchases.

Miami-Dade County is no stranger to these news or numbers. For the last 12 months, inventories have been steadily declining, while for the past 8 months pending and closed sales have in turn, been steadily rising, helping our months of inventory to subside towards something that is begining to look like normalcy may be returning.

Don’t believe it?! The numbers and charts don’t lie! Just, take a look:

Percentage-wise, it looks like this:

  1 year
  June 08 June 09 % Change
For Sale 41934 29408 -29.9%
Sold 1164 1696 45.7%
Pended 1596 2910 82.3%

Did you notice the numbers? Homes For Sale (Active listings), down almost 30% from a year ago, while Closed Sales (Sold Properties), were up almost 46% and Pending Sales (Properties under contract and arguably, a better indicator of current market activity since this number hints at the fact that people, are buying!), were up over 82%!

All this activity has caused the months of inventory (an indicator of how long it takes current inventory to move), to drop by more than 1/2 in 12 months to almost a 52% decrease from 36 months of inventory June of last year to just over 17 months last month. As if that were not enough, Months of Inventory based on Pending Sales has dropeed by over 61%!

MonthsInventory-Sold-0609

MonthsInventory-Pending-0609

What’s causing this in the middle of the worse recession we’ve seen in decades? Who knows!! One thing is certain, inventories are being picked up and in the middle of this Price War and Beauty Contest we’re having, it is those properties that are best kept and being offered at the lowest prices which represent the best values today and that are selling first.

After all, Median Prices have dropped from $270,000 in June, 2008 to $165,000 in June, 2009. This is up 7% from May, 2009’s Median Price of $154,000, but a drop of almost 40% year-over-year. At The last time we saw these price levels was long before the boom blinded us with greed, around December, 2002, some 7 years ago now.

What will keep these numbers improving? Jobs, which should help ease lending edginess, which should in turn allow for enough financial grease and consumer confidence to rise.

Also, the hope that interest rates don’t take off, causing massive inflation. This is still among many fears in the market due to the possibility that expensive government programs and federal borrowing would require interest rates to rise in order to entice foreign investors to continue buying our Treasury paper and financing our way out of the mess we’ve created.

In the meantime, with interest rates still historically, low in the mid-single digits, and property prices possibly at a bottom and inventory levels slowly heading towards normalcy (about 6-9 months), it only makes sense for folk who are decided in buying and are waiting for that provervial bottom to come knocking at their door to welcome this opportunity once and for all.

It is said that Luck, is When Preparation Meets Opportunity. This, may just be the crossroads you’ve been waiting for so, prepare to make your luck and take advantage of this opportunity.

(Read the latest related post from the Associated Press: Existing home sales show signs of recovery)

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