HOME SALES ARE UP!
Dear Friends,
Dear Friends,
I don't have to tell you that current news reports regarding the economy are both frightening and depressing. One can't help but worry when reading headlines like those in this morning's Arizona Republic: "Crisis grips campaign, nation," "Dow hits 5-year low despite Fed's efforts," and "Retirement-fund freefall: 20% lost over 15 months." However, on CNN this morning, financial expert Gerri Willis reported that there have been 15 "Bear" markets (prior to the one we're in now) since 1929 and, historically, we have come out of all of them. She noted that they usually last about 15 months and show stock declines of about 33.5%. The big question is, "How do we know when we've hit bottom?" No crystal ball here, but, despite all the bad news about the stock market, bank failures, job losses, and the housing market, the National Association of REALTORS® today reported some GOOD NEWS: "Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates."
Click on the link below to read the NAR press release.
http://www.realtor.org/press_
According to an article ("The Housing Crisis is Over") in The Wall Street Journal on May 6, 2008, the housing market may actually have bottomed out in April 2008. The article noted that "a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor." Valley-wide, we have seen a constant rise in sales since June of this year. The attached chart shows monthly Valley-wide sales since 2003. There were 6,168 total closed sales in September, an 81% increase over September 2007 and a 115% increase over January of this year! This is the first month with over 6,000 sales since August 2006! Have we hit the bottom? Is the housing market turning around? Again, no crystal ball here, but the article in The Wall Street Journal said, "In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months."
While volatility continues and we're all currently in a holding pattern, financial experts are saying that, for those in a position to do so, this may be the time to invest rather than pull out. On the housing side, as I've said before, we're looking at a perfect storm of low interest rates, low prices, and high inventory. Have we seen the bottom? The NAR report on increasing PENDING sales (homes currently under Contract) and current housing trends here in the Valley are very encouraging! Think positively! There is power in positive thinking and positive action!
Pook
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