Spring is the time of year everything gets a new start including the housing market. For example, existing-homes had an increase of 3.4 percent between March and April.
Year after year the sale of existing homes have had a 10% increase in the months of April. By April 2011 the prices for home reached $177, 400.
In cities like Miami the median sale price of most existing homes reached $182, 000. This was a major increase from the $166, 000 the year before. What does all this mean? It means that depending on how you look at things and how optimistic you are determines how you read these numbers.
Let’s talk reality. The level of existing home sales is still way below where the market needs to be to be considered healthy. But, I am not saying that all is well I am just stating that there is a noticeable increase that is indicating a steady improvement.
Here is how all this works and why the increase is becoming more steady. There are several different types of buyers, those that jump on any price, those that wait to they think they have the best deal, and those that sit on the fence and can never really make a decision to buy.
When the prices of the homes on the market start to increase buyers that were waiting or undecided speed up on making their decision. They do this because they fear they are going to miss out on the better deal and end up buying their home at a much higher rate than they would have had they bought earlier. What this looks like on paper is the numbers stated before and reads as a major increase in the market.
Unfortunately this is not the case everywhere. In states like New York the prices of homes can be quite stubborn. What these states are suffering from is a large overhang of homes that are facing foreclosure and are having a serious affect on the market numbers. There was about 28% of the sales in the month of April that represented homes in foreclosure or being sold short of the actual money owed.
What many buyers have to face when there is a decrease in the sale price of a home is fighting against several bids especially in those states that don’t drop the prices of their homes often. However, if these price cuts continue on a steady basis the end result will be the healing of the housing market.