Chicken Little and The Federal Reserve Bank

It seems that every day we get bombarded with negative news.  OK – things have not been great, but the sky is not falling and it looks like low interest rates are at long last helping our real estate market.  For those of you who know me from my “pre real estate life” you know I’m one good market analyst.  NOW would be a really good time to list your home.  Take a look at the stats below.

Home Sales are Picking Up

Home sales are seasonal.   The number of homes sold tend to bottom out in January and peak in June and July as families complete their moves before the school year begins. And, while we were off to a slow start this year, the past few months have been good.  In fact, August sales in areas 4, 5, and 6 put in their strongest showing in 3 years. (August 2009 – 287 homes sold, August 2010 – 229 homes sold, August 2011 – 302 homes sold).

 

 

What I think is really important about this is that the improvement in home sales has been accomplished without additional tax credits.  Yes, they were great and they helped us sell homes in the Spring of 2010.  But, they didn’t help long term.  They just shifted demand.   What we are seeing now is different.  I think it’s the low interest rates.  I just can’t imagine it getting any better than this for a home buyer.

Home Prices Are Holding Steady

From month to month, the average price of a sold home in the area is going to fluctuate.  What’s noteworthy about home values in areas 4, 5, and 6 is that despite some bumpy economic times, our home values have remained relatively steady.  Compare Baton Rouge to what’s happened in cities in California and Florida.  We have so much to be thankful for here.  And, I think about that every day.

 

 

Inventory Levels are Dropping

While the number of homes sold and the average price is nice to know, what matters most when you list your home for sale is the competition:  How many homes are available that are similar to yours?  We tend to look at historical data because that’s what appraisers must use in determining home values.  But, the buyer for your home can’t buy a home that is already sold.  They choose from the existing inventory.

When inventory levels are high (greater than a six month supply) most in real estate consider it a buyers market.  When inventory levels are low (less than a 6 month supply), most would consider it a sellers market.  Just look at what’s happened to inventory.  It’s shrinking steadily.  Out of all the numbers to watch this is the most important one.

If you’re thinking about selling your home, let’s talk about what happening in your neighborhood.