Is the Market Really Picking up? What others aren’t telling you.

Posted by Help Now on Monday, June 15th, 2009 at 4:07am.

Buzz! There's a buzz in the air.

The news says the market is picking up in real estate and even people in the local industry say business is growing again. Why are they saying this? They are saying this because home sales have been going up nation wide! But, why wouldn't they? With homes in Phoenix selling for $50,000, and other great deals to cultivate the market, the ground is fertile for growth!

Lenders claim it has picked up. If you talk to a mortgage person they should say they are busier than ever. Why? Because mortgage rates have not been this low in decades. It is history in the making for low interest rates. People are refinancing, or trying to, in record numbers. Lenders are swamped, but this is only temporarily. Either the number of hopeful refinancers will decline or the interest rates will go back up. Of these two alternatives, interest rates are starting to go back up.

Locally, people say business has increased....is this true?
People are definitely recognizing the proliferation of business compared to a few months ago. Many professionals say their business is blooming and things are better than they were earlier this year. This, however, is a typical business trend. Just as the barren ground struggles to produce in January, it is historically the slowest sales month of the year. As we reach spring the desolate landscape begins to flourish, as the sown seeds of success begin to produce. By the time we reach the second quarter the sales have typically doubled. Yes, everybody's business should pick up from January to June and we are living in this time of rebirth. But you could say that about every year when you go from winter to spring or 1rst quarter to 2nd quarter statistics.

What about here locally? What is really happening?
There has not been a huge upswing locally yet! I'm talking about Salt Lake County as a whole.

Let's break down the numbers:
The number of homes sold during the 1st quarter of this year was down 20% from last year.
The number of homes expected to sell during the 2nd quarter of this year is currently down 13.6% from last year.

It is possible that June this year will surpass last year's June. Last June there were over 1150 homes sold. This made June 2008 the biggest month of the year for home sales. This was followed by a 3rd quarter slow down during July, August, and September where homes sales were consistently around 1050 each month.

Things are not really picking up as much as we have been told are they? This annual explosion of success is helping the market recover from the slow down. Still, there have been no substantial pick ups yet. Maybe next quarter will show some uncharacteristic increase. We will not know anything for certain for another month or two.

What does this mean, what is the forecast?
For June this year, I am predicting that the number of homes sold should be equivalent to last year. It is possible that there will be more homes sold, but I wouldn't expect any more than a 10% increase over last year. The hardest thing about predicting how many homes will sell is the huge amount of homes that are 'falling through.' There are more homes under contract, but there are also more deals falling through than normal. The amount of actual closings is lower due to the lending problems and new appraisal rules that came out last month. However, it appears that the percentage of decreasing home sales is slowing. This indicates that we may be at a bottom for the number of homes sold.

Interest rates are creeping back up and grant money is starting to run out. This historically opportune time to buy a home is probably just about over.

If you have been thinking of buying a home, it is time to act on those thoughts and take advantage of today's market. If you are thinking of trading up into a new home, the time is right for you. If you are thinking of downsizing, you may want to wait another year depending on where you live and where you want to move to. At any rate, start your process today! This excellent buyers' market is almost over and you don't want to miss this!

About the Author:

Utah Dave - Neighborhood ExpertUtah Dave - Daybreak Neighboorhood Expert and Local Resident

My friends nicknamed me Utah Dave in high school because they said it didn't matter where we went in Utah, I would know how to get there and who we needed to talk to. The name sticks today as UtahDave has formed into a professional real estate network of Neighborhood Experts all across the state. I live in Daybreak with my wife and 4 amazing children. I enjoy dancing (which is how I met my wife Dawn) as well as traveling, coaching, and learning.

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