Sales Are Up For the Year

by Coldwell Banker Evergreen Olympic Realty, Inc. on August 6, 2010

If you’ve ever been on a college campus the night before final exams you know the frenzied pace of kids cramming in last minute studying.

Our office at the end of April looked a lot like that. We were working with a lot of buyers and sellers to get contracts put in place by the April 30th expiration of the federal homebuyer tax credits. It is hard to imagine a busier time for contracts. April pending sales were up 34% over the previous year.

If you follow our blog you know that the tax credit itself was not responsible for stimulating demand. What it did do was speed up the home search process for buyers who were already in the market. Anyone who had planned to buy this year tried to take advantage of the credit. The result was that a lot of sales that might have happened in May and June were pulled into March and April.

As a consequence, the sales numbers for the first half are a bit distorted. Typically, sales steadily build from the winter months into the summer months before tapering off again. This year, before the credit deadline, sales were up big time. March and April sales were up over 30%. After the deadline, sales were down – May and June were both off by 20% over the prior year.

Even with the drop off in sales after April, sales for the first half of the year are up a solid 12.5% from the same period in 2009. The pent-up demand we have been mentioning over the last year is starting to come back to the market (See Chart below).

Click on the chart to enlarge.

Going forward we expect the sales to be more steady. Buyers are jumping back into the market not because of stimulus programs but because of affordability. They sense that prices are now at more reasonable levels. Sellers are also realizing that while they cannot get the lofty sales prices from 2006, they are buying the next house at the right time. As we mentioned last quarter, people are back to moving because it makes sense for their life, not because they are expecting over-the-top investment returns.

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