What we really need right now is some certainty. There are just toomany question marks in the minds of buyers today. The housing market isdown and no one is sure where the turnaround is, the stock market islacking direction, interest rates are uncertain and people are worriedabout fuelprices. Unfortunately, the media does a very good job of highlightingbad news and reinforcing uncertainty.
Anyone who has read my report for a while knows that I am not one tospin the data. But I would like to take this month's report to lookat the positive facts.
So lets look at what we know.
Unemployment in the state for the first quarter was at 3.7% and onlyslightly worse than last year (3.5%). Much better than our neighbor tothe south, Massachusetts, at 5%. Employment has been fairly consistentover the past couple of years. Although the figures are nice to lookat, I think at times it is better to consider how people feel abouttheir job situation. Based on the people with whom I havespoken, I would say that not many are worried about their job. That'spretty positive.
To illustrate the strange effect we are seeing in this market where jobsecurity is high, we can look at what is happening withprices. The average price per square foot of a home sold wasdown 4% from last year yet the average selling price wasdown only 1% from a year ago. So it seems that as the prices of homescome down, people are buying more house. Perhaps it is a slightlylarger home (The average size of a home sold in Q2 was 2,333sf, the highest of any quarter since 2001!) or it has morefeatures. The fact is, buyers are able to afford homes and show awillingness to spend the money to get what they want. Again, this wouldnot happen in a poor economy!
We also know that the time that a sold home was on the market came downthis month (128 days) and sold closer to its asking price (within2.5%). Sellers seem to have adjusted to the real estate situation andhave lowered their asking price. The homes that are well priced areselling.
I find it hard to look at this market and be pessimistic. True, we areclearly in a buyers market with a 9.6 month supply of homes. (a 6 monthsupply is considered balanced) But we had a very hot market up untillate 2005. Though it was a lot of fun while it lasted we are only justgetting backto a more realistic and, hopefully, sustainable market. Now if we couldonly get the news media to report more realistically I think we wouldbe in muchbetter shape.
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