Summer Housing Market Remains Strong

For  more than 4 decades, our real estate market has seen two very distinctive spikes in closing activity. The first spike happens the last Friday in May, the second occurs the last Friday in August. Of course, this is due to families with children wanting to move near the end of the school year so their children can meet new friends over the summer. For those who miss that last Friday in May, the last Friday in August is their chance to get moved and have the children start and stay in the same school for the entire year.

While this double spike has historically been the case for nearly 40 years (the exception being 1982 when home mortgage rates were hovering around 17% and nobody was going anywhere), 2012 is showing a slightly different trend. This year we are continuing to see activity build beyond the May spike, including the number of pending sales (homes with accepted offers and contingencies removed). We are seeing sales outpace inventory which means the market is coming more into balance. There are lessons to be learned from these numbers for sellers and buyers alike.

For Sellers: The buyers are out there now, and with sales outpacing the supply of inventory, home prices will soon begin to stabilize, if not increase. Putting your home on the market now is likely the best opportunity for sale that has existed in the last 5 years. In a few cases, houses have been on the market for just a few days before they receive an accepted offer.

For Buyers: With interest rates remaining in the 4% range, your house payment is approximately one half of the amount it would be if you were purchasing in a more typical market where interest rates average 7%-9%. The lesson for buyers is simple: don’t lose sleep over whether you can get the seller to accept one more counter-offer for a couple thousand dollars less in sales price when you could be saving five thousand dollars, ten thousand dollars or even more interest dollars each and every year you own your home by locking in a loan and making a purchase now.