The graphs below illustrate the changes and the positive signs in our local market. Graph #1 charts the demand in the resale market from January 2001-June 2011. The high peak is 2005, of course, then the rapid decline, and now thte movement back up to the lower level of 2005. There is a small bump in demand during the federal tax incentives that put a stop to the price fall.
Graph #2 is the average price per square foot, monthly sales. The drop in ppsf is obvious, but the good news is the relatively flat pricing for the last 9 months. The much touted "double dip" Has already occurred. This defies the national news where home prices are still in decline in most states, at least according to 4-6 month old data.
Another promising trend is the drop in supply of all housing in the MLS. While this varies from zip code to zip code and even within neighborhoods, we are down to about a 6-month supply of homes, the level that indicates a healthy market. Some areas are down to a 3-month supply while other areas have more than 2 years. This figures also varies by price point.
The price of homes is always the last change in the housing market. This is why home prices did not drop immediately when housing demand began to decline and inventory was on the rise. It will be the last to change as the market improves but it will catch people by surprise. The rise will not be huge nor will it be in the every type of housing or in every city. As long as there is no catastrophic downturn in the national economy (knock on wood), and we keep moving in the right direction, we will see the change!
