Year Over Year Home Sales Improve Again
Tallahassee year over year home sales improved for a wonderful 6 out of the past 7 months, according to the newest real estate market data that I reviewed this morning. This report gives us a great perspective on the relative movement of the housing market over time.
The real estate graph above is very simple. As each month is computed, it is compared with its corresponding month from the previous year (this April was compared to April 2009). If there were more home sales during the month this April than last, it will be reflected with a percentage growth above the zero line. If the contrary is true, it will show the percentage drop below the zero line.
Now that we have posted gains for six out of the past seven months, we should be able to feel comfortable that the recovery is under way. More home buyers are buying now than the past periods, and hopefully this will continue to grow until we are back up to historical norms.
Home Prices Drop To Stimulate Home Sales Growth
As we have discussed in the past, the Homebuyer Tax Credit helped get the recovery started, and as the summer rolls in (and then out), we will find out how much improvement has occurred beyond what the tax credit was able to initiate.
Falling home prices have also stimulated buyers. More and more home buyers are wanting to take advantage of home prices that have dropped below replacement costs.
The trend for falling prices will continue until supply and demand levels stabilize at normal market levels of 5 to 6 months of supply. With our current 12.5 months of supply, stabilization will require significantly more buyer activity.