Green Shoots for Spring? March Real Estate Market Stats

by Alex Stenback on April 10, 2009


MAAR has just released the numbers, and point to some ‘green shoots’ in their press release:

Three key barometers of market recovery showed signs of hope in March:
1. The March Average Days on Market Until Sale is 9.0 percent lower than a year ago.
2. The March Percent of Original List Price Received at Sale is 0.6 percent higher than a year ago.
3. The April Supply-Demand Ratio, which measures the number of houses for sale per buyer, is 23.5 percent lower than a year ago.

Definitely encouraging news – low rates, low prices, and plenty of incentives are doing their job to soak up inventory.

The market remains bottom-heavy, with foreclosures and short sales accounting for 53.5% of the pending sales and posting a median price of $122,000.00.  Accordingly, median and average sales prices continued to slide (down 22.9% and 22.4% respectively) but it must be noted that those figures are so heavily influenced by the number of sales in the lower price bands that they are not a very useful baromoter.

Despite the good news, headwinds persist.  Chief among them, as you can see in the graphic above, we still have a supply “overhang” that needs to work itself out.   But also:

Sellers may still face challenges, but lower rates, higher affordability, and lower prices may make 2009 a sweet spot for aspiring homeowners.

{ 1 comment… read it below or add one }

Chuck April 19, 2009 at 5:44 am

It continues to amaze me the lack of understanding of what Alt-A and Option-ARM loans did to the housing market during 2003-2007. The “resets” discussed in the media imply that these are “Traditional ARM” resets, e.g., simply a rate adjustment. If fact, nearly all of the Alt-A / Option-ARM loans have a reset from paying interest-only to interest-plus-principal, and for most people who used these loans, it means immediate foreclosure. It’s a small fraction of borrowers who can budget a doubling or tripling of monthly mortgage payment.

Another way to think of it is that Alt-A and Option-ARM loans allowed a borrower to “temporarily” live in a house that cost 2X or 3X what they could afford/pay off.

Now that these loans are gone, the market will fall back to pricing with traditional loan underwriting, which is 1998-2001.

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