Monday, July 28, 2008

Why Buyers are Back to the Market in Pennsylvania & New Jersey

Existing Home Sales data from June 2008 show signs of leveling off -- potentially good news for real estate values nationwideStatistics won't always tell the whole story, but they often provide good perspective.

The graph at right shows Existing Home Sales data going back three years. An "existing home" is one that can't be called new construction; a "used home", so to speak.

Note the steep decline from 2005 through late-2007.

Since November, however, Existing Home Sales have remained within a very tight range and appear to have reached a flattening point.

The Existing Home Sales data supports the word-on-the-street from real estate agents nationwide that buyers are returning to the housing market in search of good values.

But let's not forget -- demand is only half of the story. There is the supply factor, too, and the supply side of the housing market is showing the same leveling signs as the demand part.

Housing inventories are leveling off, as of June 2008Looking at the national inventory at left, the number of existing homes for sale has hovered near 4.5 million for the last several months. No change suggests strength.

Now again, statistics won't tell the whole story but there are plenty of positive signals from the real estate market right now, just like there are negative ones, too.

This is one reason why real estate data causes so much debate -- people want to take an either/or proposition about the state of the real estate and it doesn't work like that. Real estate can be simultaneously strong and weak and when it is, buyers look for value.

On a local level,rates have been good, and our local inventory is smaller then the national inventory. Combined with Philadelphia being walkable (and therefore energy friendly) and affordable, people have started acting on their real estate needs and making purchases.

Perhaps this is why the national housing data is beginning to level off after a 3-year slide. There's good values to be had, and today's home buyers know it.

(Images courtesy: Wall Street Journal Online)