Phillip's Blog

It’s been a few weeks since my last posting to this blog. I am somewhat disappointed that no one called to ask if I was in good health. Guess that proves that no matter how important we perceive ourselves to be, it simply isn’t so. Oh well, on with bigger issues.

The numbers were released last week for February and this combined with January’s numbers show that the prospects are still uncertain, especially given the typical seasonal fluctuations. I won’t bore you with all the details and graphs, but here’s a quick run down on the three important indicators that I track monthly.

Inventory – it is still way too high for this time of year, coming in at about 14,500 units currently on market. This is just under the inventory peak we experienced back in the fall and shows that despite the negative warnings, local home builders have continued to churn out new homes. This blows my mind and sets them up for some serious fire sales later this year.

Median Home Price – it has dropped steadily from the high of $187,900 in December to the current level of $168,000. This is the lowest median home price since March of 2006, and probably a function of the ridiculous inventory levels.

Gross Number of Closed Units – here’s the bright spot in the discussion – this number is on the uptrend! While it is still lower than it was last year at this time, the difference is very slight, and on a graph the lines are almost right on top of each other. More importantly the trend line is tracking exactly like the previous two years. While that may not be HUGE news, it does indicate something positive – people are still buying houses at the same pace they have been.

I’ll be quick to stress that the first two indicators definitely work in tandem – it’s the old supply versus price equation. Too much supply equals falling prices pretty much every time. Sometimes the third indicator will also trend with the other two, but here it obviously has diverged and is looking very much like previous markets have at this same time of year. In this, we see positive news in a dim market outlook. Personally, I still think this spring and early summer will see our local area pull out of the doldrums and start the move upward. That puts us far ahead of a lot of the rest of the country.

Hope this information helps. As always, we are here for you!