What conclusions can be drawn from May 2011 housing statistics?
It continues to be difficult to compare year over year statistics as the post tax credit slump adversely impacted May 2010 sales figures. When compared to May 2011
statistics, pending sales increased dramatically by 13.2%, new homes on the market jumped 10.8% and total housing inventory shrank 11.8%, the lowest May
count since 2005 according to statistics published by the Minneapolis Area Association of Realtors.
Any increase in sales/decrease in inventory is welcomed yet we should be cautious about drawing any long term conclusions. As you would expect, housing sales are
strongly tied to an individual's perception of financial prosperity. Employment remains in a slump and the threat of increasing prices on basic commodities (food, gas, etc.) may dampen any feelings of economic wealth.
There also remains a concern that as people struggle to figure out how to allocate ever tightening budgets, the mortgage payment may lose out to food, utilities, etc.
leading to the prospect of more lender mediated sales.
What does this mean to you and me? If you need to sell your home, there's little incentive to try and time the market - waiting until summer, after the holiday,
etc. Prices have unlikely hit the bottom yet the continued low interest rate remains the one bright light in this market. If you don't need to sell, wait out the market, it will rise again. (I promise!)
As a buyer, the cost of purchasing a home will very likely never be lower. Despite media reports, mortgages are available to qualified buyers although the process can be a bit more time consuming. It also doesn't pay for you to try and time the bottom of the market because interest rates can (and most likely will) rise, causing the cost to buy a home to go up.