Home Sales Still on the Rise

by Coldwell Banker Evergreen Olympic Realty, Inc. on March 5, 2010

Home Sales Still on the Rise

Thurston County home sales logged another solid month in February. Pending sales, those under contract but not yet closed, were up 11% compared to February 2009. The 308 pending home sales made for the fifth strongest February on record.

Closed sales were also up over last year. There were 178 home sales closed during the month, a 22.7% rise from last year. The percentage gain is big but tends to overstate the proposition. The dismal 145 sales last February was the worst that month had seen since the year 2000, which was abnormally low due to the Y2K scare happening at the time.

Still, the increase in activity is a good sign. It is the result of two factors: affordability and first-time buyers. The median sales price of homes sold in February was $233,440, down 10% from last year at this time.

That drop in market-wide price overstates the decline for most individual properties. That is because so many homes are selling at the lower end of the price scale and relatively fewer homes are selling in the upper price ranges. That imbalance in sales is certainly distorting the data.

So even if prices on individual homes aren’t down 10% since last year, most homes throughout the market are down double-digit percentages since the peak of the market in 2007. With those prices coming back to sustainable levels, we are seeing people become shoppers again. First-time buyers, armed with the soon-to-expire $8,000 tax credit, are making the lower-end of the market move again. Right now, seven out of ten buyers are purchasing homes $250,000 and under.

We are seeing prices moderate in the mid-tier price ranges and we expect to see more activity there as a result. Sellers in these price ranges would be wise to make any needed price adjustments sooner than later. The repeat buyers looking to put their own $6,500 tax credit to work have less than two months to use it.

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