What an interesting year! No federal tax credit, record-low interest rates, and a booming Tri-Cities economy combine to create an fascinating picture.
Two seemingly disparate facts tell the 2011 Tri-Cities real estate story.
#1 – Total sales for the year – 2,734, which is the second lowest total within the last ten years. (The lowest was 2,619 in 2002.)
#2 – Average Sales Price – $202,500, which is the highest average sales price our market has ever had.
So, even though fewer people purchased a home than in years past (lending restrictions were tightened, the national unemployment picture had some locals worried), the ones who DID buy a home spent more than in years past.
I said it several times, and it bears repeating: If you’re going to buy a larger home (which almost always translates to a higher price tag), do it NOW, while rates are low. A $200,500 house purchased when rates are at 6%, (20% down, principal and interest only), will give you a monthly mortgage payment of $956.89. But at 4% interest, you spend only $763.23 — almost $200 a month in savings!
Demand was low last year, supply was steady, and prices went up. That means appreciation for our market. Any year with houses selling for more than the year before is a good year. Also, when it’s a nice, solid appreciation of 2%, that’s very good news. It means the market isn’t getting ahead of itself and there isn’t runaway inflation happening.
Take a look at all the stats for yourself, and call me if you have any questions about any given graph. And happy 2012!