September Market Report

The September Market Action Report came out yesterday with a mix of good and bad news. Here's the good news:

• Compared with September 2009, average sale price increased 3.6%


• Closed sales increased 11.5% over August 2010


• Month-to-month inventory dropped from 11.9 months to 10.4


• Year-to-date closed sales are up 7.1% over 2009

And the bad...

• Compared with September 2009, closed sales dropped by 23.6% and pending sales decreased 31.6%


• Pending sales dropped 8.3% from August 2010


• In the third quarter of 2010, closed sales fell by 29.9% compared with third quarter 2009

So what does it all mean? While 2010 may end up being a better year than 2009, it likely won't be by much. While closed sales are up year-to-date, the expiration of the homebuyers tax credit led to a very slow third quarter. The next two-and-a-half months will determine whether 2010 improved at all over 2009. Locally, prices appear to have stabilized, which is an important step toward recovery. It remains to be seen what the impact of the foreclosure moratorium by Bank of America will be. The concern is that halting foreclosures will allow "shadow inventory" to build up that will have a negative impact on prices whenever it enters the market.

Bottom line: interest rates are very low and inventory indicates this to be a buyers market, but everyone's situation is different. Until there is recovery in the job market, there won't be consistent growth in real estate.