Posted by Rob Minton
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In my post below, "Time to get off the fence," I wrote that I have been seeing articles in major publications hinting that the bottom could be in sight for some real estate markets here in the United States.
Now, it seems we might have some more indications that the worst has possibly past for some markets.
Today, the National Association of Realtors released sales statistics for the first quarter of this year. Of course the headline for this Associated Press article is "Median home prices fell in US in Q1," as the headline writers continue to beat us over the head with negativity and continue to get paid to state the obvious. Anyway, the article says the median home price here in the States fell about 13.8 percent from a year ago.
Considering the fact that so many foreclosure bargains are making up our sales statistics these days, the price drop is totally expected. Frankly, I am a bit surprised that it was only a 13.8 drop. But buried in the bad news (depending on how you look at it) about median home prices -- and disguised as even more bad news -- was a bit of good news.
From the article:
"Home sales fell in all but six states -- Nevada, California, Arizona, Florida, Virginia and Minnesota -- where buyers have been able to snap up foreclosures at a deep discount.
Sales more than doubled in Nevada, rose 81 percent in California and grew 50 percent in Arizona -- signaling that the worst may be over for those distressed states."
Notice the language "Home sales fell in all but six states." That sounds like bad news. But the real news, in my opinion, in this story is the DRAMATIC increases in sales in the states that were hit the earliest and the hardest by the real estate bust.
As I said in my earlier post, there is evidence that first-time homebuyers and bargain shoppers are finally helping revitalize some of the worst housing markets. I think this is a good sign that other markets will follow, just as they lagged the California, Arizona and Nevada markets on the way down.
The fact that foreclosures make up about half of all U.S. sales right now will keep prices flat for a while, but as more buyers come out of the woodwork and sales of existing homes continue to climb, we will start to see price increases again.
It's a good time to pay attention to sales of existing homes and foreclosures in your market if you're trying to time the "bottom" of the real estate market. If sales are on the rise and foreclosures rates are dropping, it is a good sign prices will soon start to rise.
I will say it again -- now is a good time to buy!
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