Monday, March 24, 2008

Homes Sales Rise While Prices Drop

The NPR radio show Marketplace reported this morning that home sales jumped 2.09% in February. Analysts had expected another month of slumping sales volumes; it would have been the 7th in a row. At the same time the number of homes sold increased, the prices for those homes decreased. NPR surmises this is probably a function of more home sellers getting realistic and dropping their asking price.

There's so much data in our local MLS that I can't crunch enough numbers to support the above theory. I rely on Realtor John Wake for most of my stats; he's a whiz at that number crunching.

I keep my eye on the anecdotal data. My favorite title officers say that January & February were booming months for closings. My favorite in-house lender Kristi Collins of Coldwell Banker Home Loans (602-750-8594) agrees. Me too. I was swamped from Novembver through the end of February.

It's quiet now. I think it's the calm before the storm. In a good way, of course. I think that late spring and summer will be the workhorse months in metro Phoenix. We'll burn through inventory, get rid of the homes in the MLS that shouldn't be there, and sell some great homes at realistic prices to investors and first time buyers. 

Rates are still historically low. I locked a buyer at 5.81% for a 30-year fixed rate mortgage on Friday last week. Rates bounced up again to 6.125% this morning. But compared to the 17% and 18% that was common in the early 1980's that a bargain.

The sellers left on the market these days are anxious to get sold. They'll agree to pay closing costs, help first timers gather a down payment. We're even hearing talk of sellers helping to buy down mortgage rates.

Calm before the storm or beginning of the end? Time will tell.