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What June’s “under contract” table shows is that people are still buying houses.  In May, it was almost as if everyone took a deep breath and…held it!  The number of homes that went under contract in May was more like what we see during the winter months, not the sunny, not-too-warm-yet spring we experience here in the Tri-Cities.  June, however, brought us back far closer to a normal early-summer number.

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Phew!

The good thing about doing a stat post so late like this is that we won’t have to wait so long to see if July reflects the trend I think began bubbling up in June!

This is a big problem for anyone looking to rent and not buy. As I detail in this post from almost a year ago, when the problem was the same, there is just nothing available. The problem is compounded when you add a family and a pet.

And, as this KNDU story illustrates, it’s bad news for people down on their luck looking for some shelter just for themselves, never mind 1.86 children and a dog or two.

Department Director for the BFCAC (Benton Franklin Community Action Committee), Debra Biondolillo says it’s not easy finding low income families places to live. Partly because there’s not as many vacant places as years before.

“They are in a position now where they have an over-flux of people applying for these apartments and can be choosy about who they put in these apartments,” said Biondolillo.

So, we need some new construction, which the Herald reported on Sunday, is on its way! Amen!!

Aaaaaaahh! See? Scary! The 2010 line takes a sharp turn and plummets down in the month of May. If you just glance at it, it appears as if the market has taken a heretofore ungraphed tumble. Even September into October and November of ’09, which saw a decline, did not turn at a right angle like May of 2010 did.

So why is this not as alarming a situation as it appears? Because we are coming off of a banner January through April. Sales were at, on average, 146% of the same month the year before. And, just like we don’t trumpet a significant increase in one month’s sales as a sign that All Is Good And Bright On The Horizon, neither is an decrease of 47% over the same month from last year a sign of the Apocalypse.

Related: Real Estate Tax Credit: Its Effect on the Tri-Cities Market

The real estate tax credit expired.

In order to qualify for the $8,000 first-time home buyer or $6,500 move-up buyer tax credit, an offer needed to be written and accepted by April 30th, and the sale must close before June 30th. Clearly, as evidenced by the precipitous drop in sales written at the beginning of May as opposed to the end of April, the tax credit incentives most certainly had an affect.

So it makes me a bit anxious when I see headlines about an improved real estate picture for the nation. This quote is especially concerning -

This year looks to be different. Already, falling interest rates, an improving economy and a last bit of economic stimulus are helping the housing market stage a revival. In April alone, sales of existing homes jumped 23% from a year ago, according to the trade organization National Association of Realtors.

Well, of COURSE sales jumped in April. The tax credit was going to end at the close of the month. Anyone who wanted to take advantage of it needed to get it done right then. Look for an article this time next month saying that the recovery was not what they thought. It’ll be interesting to see what May’s numbers shake out to be across the nation, because we already know that for the first three weeks of May we saw a definite decline in the Tri-Cities real estate market.

This article in the New York Times discusses how it truly is a great time to buy a house in many areas of the country…especially areas where it was a horrible idea to buy just a few years ago. They also include a calculator that helps you find out what is best to do in your area.

So, what’s best for Tri-Cities real estate shoppers? It’s a fantastic idea to buy here because our rents are increasing due to the high occupancy rate — we’re at 98%. (I don’t know how much rents are increasing, I just know they are.)

To help you fill in the blanks in that calculator, here’s some Tri-Cities data you need to know -

• 30-year mortgage rates are hovering at 5% (which would be your interest rate if you’re the perfect borrower, so make it closer to 6% if you know you’re not).
• Tri-City home prices go up between 1-3% a year, so play it safe and place the bar at 2% on that question.

Have fun playing with the numbers, and call me if it’s time for you to buy here. As of this morning, there are 1064 houses available for sale in the Tri-Cities area. Surely we can find one for you.

On Sunday, I presented an offer to some clients.  The offer was written by an agent that was trained at the same company where I trained.  We learned the letter of the law, that’s for sure.  There is hardly a line on the contract that we don’t know backward and forward.

The deadline for the sellers’ answer was noon that day.  I told the sellers that the buyer’s agent and I trained at the same place and I know she had been taught to make the deadline time 5 pm, as I had.  The fact that the offer’s deadline was at noon meant to me that her client had another house in line to offer on if this one didn’t work out.  When the time line is accelerated, one can sometimes assume that the buyer is in a hurry to get everything settled as soon as possible, and to the buyer, they’re not buying what they love.  They’re buying what works for them.  The seller exclaimed, “It’s like a code!”

The more I think about it, the more I realize the seller was right.

Monday night I was leaving the office and waiting in my car to turn out of the parking lot onto the street.  Behind me was another agent in his car, waiting as well.  While waiting for the traffic to clear, another agent from our office pulled into the parking lot and completely ignored me and, I learned later, the agent behind me.  There was no nod of acknowledgment, no raise of the eyebrow, no tilt of the chin nor a wave of the hand.  Nothing!

That’s code, too, I thought.  The code is that fellow agents are just as much part of my clientele as people buying and selling houses are.  It’s knowing how other agents think and what they’re telling their clients that brings another level to this business.  It makes it so much better than just writing figures on a piece of paper and crossing my fingers that the offer will go through!

Other than the fact that this means more jobs, and a boost to the economy, it’s good news for the local real estate market, too.

When no one is building new homes, the current supply of homes is all there is. Therefore, a seller’s market is created. Limited supply combined with regular or increased demand creates a situation where home prices rise. While this is good news for sellers, it isn’t for buyers. A balanced market is actually the ideal situation.

Be sure to read the whole article I linked to in the first sentence. They interview a cross section of builders in different price ranges, all of whom report positive news.

…the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

Ouch.

What about Tri-Cities Foreclosures?

In the last quarter of 2009, we had 124 Notice of Trustee Sales issued. The first quarter of this year we had 176. That’s a 40% increase. Sounds awful, doesn’t it?

Compare it, however, to the first quarter of 2009, when we saw 259 Notice of Trustee Sales issued in the Tri-Cities. The first quarter of 2010 saw a 33% DECREASE compared to the year before. The last quarter of 2009 saw a 39% DECREASE from the same period in 2008 (201 Trustee Sales). So, while it looks like we’re following the nation in this wave of foreclosures, we’re actually gaining some ground and doing better than we had in years past. Good to know!

Data used in this post is courtesy of the Benton Franklin Title Market Report, distributed monthly.

How does that compare to Tri-Cities real estate? Our average sales price is in the 180′s! As in, one hundred, eighty thousand-dollar range!

March’s real estate market stats paint a pretty bleak picture for the small portion of our market which is our upper-end.

In the Tri-Cities, we have 73 homes (out of about 1,000 listed) available at prices from $500,000 and up. In March, two of those sold and one went into escrow. So, at a rate of one per month, we are looking at six years to exhaust the supply of upper-end homes. And that’s if nothing new came on the market. Six years! Yikes! That’s a buyer’s market on the most extreme end!

You can click here to download the full March 2010 Tri-Cities Real Estate Market statistics. (PDF, 3mb)

Which has been excellent!

There were 988 listings on the market, whereas a year ago there were 1178 listings available.  Fewer listings = low supply.  What happens when supply gets low?  If demand stays the same or increases, we see people paying a premium for what is available.  That means it’s a seller’s market.

But, we can’t paint with that broad of a brush in this case.  We have to look at the price points.  In certain price ranges, we have low supply and high demand, which absolutely makes for a seller’s dream situation.  However, the same low supply in a price range with little to no demand makes for a buyer’s market.  Make sense?

The highest demand is for the lower-priced homes.  As a rule, homes under $200,000 are selling at a pretty fair clip, because that’s the range people are buying in and there isn’t one available on every street corner.

That’s why the average sales price for a home is currently $185,847, but a year ago it was $180,177.

The days spent on the market is decreasing, too. Just by 4 days, but 4 days a quarter makes two weeks by year-end and that’s a 13% decrease in marketing time.  How’d you like to be on your way to your new home half a month earlier than you thought?  Pretty nice deal, I’d say.