Spring has sprung, the weather is warming, the flowers are blooming, the allergy sufferers are suffering…and houses are selling! The good news is that March saw 135 single family house sales, a number that sounds pretty good, compared to past months. The bad news is that the “dollar per square foot” figure is the lowest since March of 2003 at $85 a foot, and the median sales price was down to $121,900, the lowest since July of 2002. Average days on the market was 153, and with 1570 houses currently on the market, we have 11.62 months of inventory currently listed.
Prices are continuing to adjust downward even as the inventory contracts, mainly due to a lack of consumer confidence and uncertainty in the market. On the other had, investors with cash on hand are aggressively buying, snapping up bargains to rent until the market comes back. 31 (22%) of the March sales were cash deals.
Speaking of rentals, I had four vacancies come up in the last few weeks, which is almost unheard of for me. I was pleasantly surprised at the number of calls that I got and the quality of tenants that applied. I looks to me like the rental market in strengthening, due in part to the number of people who have been foreclosed out of their homes and are now turning to rentals for shelter. In my opinion, many of these recently foreclosed homeowners make excellent tenants. The fact that they were foreclosed on is not necessarily a reflection on their character…they are often good folks the just got swept up in the buying frenzy of 2002-2006.
Are we at the bottom yet? I don’t think so. I think there is still a big backlog of houses to be foreclosed that will push the market further south. On the other hand, I think that there are great deals to be had right now, and trying to time the bottom of the market (any market, for that matter) is practically impossible. With prices at 10 year lows and cheap interest rates, it’s hard to go wrong. Go buy a house!