RE/MAX Finds Home Prices Defy Predictions, Yet Remain Stable

December 17, 2010

A recent RE/MAX LLC survey has found that in recent months, the real estate market has been impacted by several outside forces that have resulted in some uncertainty. While the tax credit has expired and some lenders are still working their way out of a foreclosure moratorium the market is struggling to find secure footing. A monthly survey of 54 metropolitan areas indicates that sales were 4.9 percent below those in September and 25.9 percent below sales in November 2009. However, sales declines appear to be headed in the right direction, with much smaller losses than were recorded last month. Housing inventory continues a trend of single digit declines, while home prices only fell 1.7 percent from last year.
“While home sales usually decline in the winter months, we are seeing a larger than normal correction this winter due to several artificial factors like the expired tax credit,” said Margaret Kelly, chief executive officer of RE/MAX LLC. “Despite predictions about falling home prices, they appear to be remaining stable with several markets reporting significant price increases over last year.”

Typical of the winter holiday season, transactions were down almost uniformly in all 54 metro areas with an average of 4.9 percent below sales in October.
The top five markets experiencing month-to-month sales increases are:
►Jackson, Miss. +9.2 percent;
►Billings, Mont. +9.2 percent;
►Las Vegas, Nev. +4.7 percent;
►Birmingham, Ala. +3.8 percent; and
►Miami +3.6 percent.
None of the 54 metro areas showed a sales increase from November 2009.
Although, many in the real estate industry still anticipate price corrections, the November RE/MAX Housing Report indicates that prices are remaining stable, with only an average 1.7 percent drop from last year. Of the 54 cities surveyed for this report, 36 showed price increases from last year, 17 were lower and only San Francisco remained unchanged.
The top five markets with price increases were:
►Burlington, Vt. +17.2 percent;
►Trenton, N.J. +15.9 percent;
►Raleigh, N.C. +13.3 percent;
►Washington, D.C. +9.4 percent; and
►Boston, Mass. +8.8 percent.
Days on market measures the average number of days from listing to signed contract for those homes that sold during the month. For November, the average days on market for the survey’s 54 metro areas was 93 days. Only two days longer than the 91 average in October and seven days longer that the November 2009 average of 86.

November saw the inventory of homes on the market drop by 4.6 percent from October to a level that is just 2.3 percent below November 2009. Last month the average Months Supply of Inventory for the 54 metro areas in the RE/MAX National Housing Report was 9.7. In November that number rose to 10.0, which is one full month longer than the November 2009 supply. The months supply is the number of months it would take for the current inventory to be cleared at the current rate of sales. A market balanced between buyers and sellers is assumed to be six months. The last such near-balanced market was in April 2010 when the supply stood at 5.5 months.

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