Last month, it was easier to sell a home than it has been for almost two years. February had 1,000 more home sales than January did, yet the inventory of unsold homes remained almost the same.
If things are going to improve for home sellers this year, these are the kind of figures we want to see. We would like to see sales rise while the inventory remains relatively low. (I have to specify “relatively” because our inventory is currently much higher than it was from 2000 to 2005.) The good news is that February’s inventory was 15 percent lower than February 2008.
Although these figures indicate that it is getting easier to sell a home, that won’t help sellers get more money for their homes. Not yet, anyway.
• To download a PDF of the chart, click here
We have too many foreclosures that are dragging down prices. For example, a friend’s condo is on the market for $300,000. The Realtor felt confident about that asking price, until a similar home came on the market last week. It’s a foreclosure, listed for $275,000 with nicer amenities. Suddenly, $300,000 sounds high rather than competitive.
Unless buyers bid up the price on that foreclosure, my friend might have to accept less than $300,000 for his condo. This example illustrates why home prices have been falling, even as sales have improved.
Sales were up in February while inventory remained flat, so the sales chances were higher in February than in January. Sales chances were 17 percent last month, up from 15 percent in January, and significantly higher than February 2008 when sales chances were just 12 percent. The last time sales chances were 17 percent was April 2007.
Sales chances are calculated by dividing a month’s sales figures by the inventory on the last day of the month, resulting in a percentage. A figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.
• Contact Chris Sicks by e-mail (csicks@gmail.com).
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