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Are We Turning The Corner Towards More Positive Times? |
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Take a look at home sales activity summarized by Quarter . . .  As you may notice, we've seen a steady decline in the number of residential sales in Harrisonburg and Rockingham County since 2005 . . . until the fourth quarter of 2009. Look again . . .  Please note, first, that the final fourth quarter 2009 sales figure is extrapolated based on data available as of November 30, 2009. So, my data could be wrong --- but I recently made some wild guesses about November 2009 sales (first I guessed 65, then I guessed 76) and they were both too low (the final figure was 82)! If we do see an year to year increase when comparing 2008-Q4 versus 2009-Q4, I think we can get excited about 2010 being the year when home sales finally started increasing again in Harrisonburg and Rockingham County. That being said, I will still allow for skeptics to blame it on the tax credit, or for other factors in the current market. Any skeptics out there? | |
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Scott Rogers
Coldwell Banker
Funkhouser Realtors
540-578-0102
scott@cbfunkhouser.com
Licensed in the
Commonwealth of Virginia
Harrisonburg New Homes
Heritage Estates
The Glen at Cross Keys
Meadowbrook
Cottages @ Stone Spring
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Founders Way
Harrisonburg Foreclosures
H'burg Real Estate Radio
Dear Scott,
Only becuase you egged me on with the "Any skeptics out there?" Of course higher volume is a positive. However, the true test of a recovery is when interest rates are back to normal, the govt interventions over, and housing prices prices and sales volume have stabilized. Given that interest rates are at historic lows and the govt is still heaping on the incentives, the equation is too tricky to ascertain what the real market fundamentals are doing. One needs to look no further than the effects of the Cash for Clunkers program (for jumpstarting automobile sales) to see what happens with govt programs. The last month of the program saw a huge surge in sales, followed by a tremendous plummet the next month when the program was defunct. Regardless, having sales up in Nov cannot be a negative. One just has to ask if sales volume was pumped up in Novemenber at the expense of volume in future months.
December 17, 2009 3:24 pm
Keston,
I knew I could get you with that line. :)
First, I agree that we need to wait and see what happens when the government incentives end ($8,000 to first time buyers and $6,500 to long term owners). That certainly could be getting people into the market who wouldn't be otherwise. It now looks like we'll have to wait until July or August for that, since the tax credits now end on June 30th (houses under contract by April 30th). The interesting part with that timing is that July and August are typically rather strong months, so I doubt we're going to see a very significant adjustment in sales pace. Furthermore, this is the THIRD tax credit --- and the pace of our market has steadily decreased ever since the tax credits began. If sales activity had stabilized or increased once the tax credits began, I might believe that activity would drop off once they ended.
On the interest rate issue -- yes, rates are extremely low right now. However, rates have been low and/or declining for the last year, and sales activity hasn't been increasing. In fact, despite absurdly low interest rates for several years, sales activity has become slower and slower in this area. Thus, I'm not sure that we could conclude that sales activity is going to decline if interest rates go up. There hasn't seemed to have been a correlation for the past few years --- why would it start now? (Certainly, if rates jumped 2% or 3% higher, that would affect sales activity.)
By the way --- I greatly appreciate what I consider to be your HEALTHY skepticism. Thanks for your comments, and please continue (on this post and other future posts) to bring your perspective to the market statistics that I present.
Thanks!
Scott
December 17, 2009 8:13 pm
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