Every week, I check to see how many houses in different price ranges go pending. I look at under $100k, $100-150k, $150k-$200k, $200k-$300k, $300k-$400k and $400k-500k. I stop there because there are never many sales over half a mil and I don’t do too much work over that anyway. I have been totally amazed at how many houses are selling in the $100-$150k range….even the week before Christmas we had a bunch of them.
That price range is where the first time buyers are. Like I’ve always said, you need the first time buyers to drive the whole market. You need them to push all the more expensive deals through. I guess these low rates have brought them out. Just for fun, I checked to see how many sales there have been in that price range in the past 6 months. There were 432. During the last 6 months of the tax credit season there were 552. Right after the tax credits expired, there was no action in most price ranges, especially this one. Glad to see it come back. I knew it would. Regardless of the economy, people are always going to graduate college, get married, start a family, take a job somewhere else, etc. People will always be moving.
I am scratching my head over something. If 15 houses in the $100-150k range go pending in a week, shouldn’t about 15 houses in the higher price ranges also go pending? You’d think all those sellers were moving up. In the past, these sellers moved up to the $175k-250k range. Now, I am thinking that some of the sellers of more expensive houses are moving down, that some sellers aren’t buying houses much more expensive that the one they sold, and that some of them just are getting out of home ownership altogether.
Want to know what I see coming in 2012? It is almost New Year’s Day, so I guess I better throw something out there. If interest rates stay low, I see the $100k-150k remaining strong. A lot of people have refinanced, so they will likely stay put for a while. I don’t see the number of local sales increasing/decreasing much compared to 2011. There has been a shift in how people view housing, so I think buyers will be a little more modest with their purchases…..meaning folks aren’t going to be shopping for the max amount of their pre-approval letter. I think the over $300k homes will be hit by this unless the house is unique, has a great location or is in the better school districts. I don’t mean to scare anybody. It’s not like the prices are going to drop by much. You just need to pick a winner. Investors will likely keep snatching up the deals under $100k and turn them into rentals. None of this is really earth shattering…..mainly just more of the same. I also think that our local list to sale price will creep up a bit. I’m not seeing buyer fear like in years past. I think that will mean they may not start offers as low, or counter a counter offer multiple times. They are just going to know they want the house and will be willing to pay a fair price.
That’s all I have for now. Happy New Year!!