Spring Sale – On Right Now!

Well, it is really basic economics.  If you have a product sitting on the shelf that doesn’t seem to be attracting any Buyers, lower the price.

That’s what WalMart does.  Sears, too!  The stock market does it about a hundred times a day, every day.

Well, guess what – homes are now on sale!

The latest data from the National Association of Realtors suggests the combination of dramatically reduced home prices plus a “rebate” strategy in the form of a homebuyer tax credit have breathed new life into the beleaguered Real Estate market.

The NAR (the national association representing over a million Realtors across the United States) seems to think that this is due, in large part, to the continuation of the hefty $8000 credit to first-time homebuyers.  This is may be true.

Read their article by clicking here.

But it is may also be nothing more complicated than the rule of supply-and-demand.  The higher the price of a commodity, the fewer the number of folks who can afford, much less buy, that product.  When inventory of that product begins to stack up, the price usually drops to a level where a sustainable number of Buyers come back into the market and purchase again.

Since there are no more “zero-money”, “no job necessary”, “stated-income” loans to sustain (artificially, I might add) the number of Buyers from a couple of years ago, prices had to fall.

How far, no one really knew.  Until now, it seems.

We have seen dramatic swings in sales, pending sales, and active listings from one month to another.  November dropped off quite a bit from the previous month. But now we see that December, surprisingly, had increased activity, and January looks like it is coming out of the gate pretty strong.

The best part of this is that housing prices seem to have stopped their free-fall, have stabilized, and have actually shown steady increases over two years ago.

This makes everybody – both Buyers and Sellers – happy.  Sellers because it appears that the erosion of their home equity has stopped; Buyers because they can be more confident that their investment will increase in value from these bargain prices rather than continue to decline.

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