Farewell to the buyers market

The pending home sale index rose for a record 7th straight month in September signaling a return to stability within the overall housing market.

Historically low prices, very low interest rates, and the $8000 first time home buyer credit proved to be a very powerful combination of incentives for those buyers with good credit and who were comfortable with their employment prospects. The wave of homes which came into the market under various forms of distress (short sale, foreclosure, threat of foreclosure, job loss, reduced income, etc.) have worked their way through the cycle and we are left today with a much more balanced market.

Sellers played a large role in the recovery in terms of coming to grip with the new reality of their homes value. For a long time it seemed like there was a significant amount of denial among sellers that the value of their home was actually declining. Over time it became more and more clear that this was in fact the case and that if they were serious about selling they would need to price their property according to the prevailing local market conditions.

As the end of the tax credit approaches at the end of November it is time to say farewell to this buyers market and hopefully look forward to a sustainable and more balanced real estate market.