The National Association of Realtors (NAR) released existing home sale figures yesterday that led to surprising headlines:  In the northest, sales jumped 14.6% in February over the month before. Was February a new high or were January sales unusually low?  You guessed it:  January’s 480,000 sales were down from December, when there were 570,000 home sales in the northeast.  February’s 550,000 sales were a major rebound from January’s low but not the harbinger of a spring market. 

We sort of knew that of course, since it is now almost the end of March here in Hunterdon County, New Jersey.  These national stat’s always lag behind the now. 

But here’s a Current and Local trend you can count on:  Showings of homes, loan aplications, and even purchase contracts have begun to increase signifcantly in just the past week or two and there’s plenty of pent up demand from the past six months to fuel the Spring Market that is just now begining.  The current and as yet undocumented trend in Hunterdon real estate activity, especially in the first time buyer range, will no doubt appear as a sizable blip on the graphs on these pages in the coming month or two.  Stay tuned.  Watch for the coming surge in local home sales.  Better yet, if you’ve been planning to sell, don’t stand on the shore, paddle out and catch that wave!

Traditionally, in the four weeks after March roars in like a lion as it did this week, before it exits as a lamb, the Spring housing market shakes off winter and comes alive.  Those tied to the school year like to settle into their new home before mid-summer.   The “Spring” market can come sooner, especially if sales were low during the previous autumn.  But not in 2009, it seems.  Despite unprecedented low sales in the last quarter of 2008, home buyers have not yet come alive, as seen below.   

Sales: Feb. 2006 = 110 | Feb. 2007 = 98 | Feb. 2008 = 99 | Feb. 2009 = 58

Last month, sales were a little more than half the previous three years.  In comparison, Feb 2005 saw 160 sales.  

Last week, the National Association of Reators issued sales numbers through January.  The numbers for the Northeast are graphed below. 

As you can see, Hunterdon County sales soared higher and dropped lower that the northeast in general.  The financial crisis centered on Wall Street kept home buyers on the sidelines in unprecedented numbers, and that malaise has continued through February 2009.

We’re at a crossroads.  There are several reasons to expect a modest Spring Market bump in the next 4-6 weeks:

1. The traditional Spring buying season, driven by milder weather and the end of the school year, is about to begin.
2. Pent-up demand:  Last quarter 2008 bench-warmers are still out there, as I said in last month’s Market Pulse, awaiting a sign. 
3. Interest rates:  They’re low and going lower still as the Fed buys up mortgage backed securities with the goal of driving rates below 5%.
4. Price:  The affordability index, which stood at just 83% in 2006, has returned to 108% in 2008, mostly due to price decreases, as seen below.  (A 100% rating means a family with a median income can afford a median priced home with tradional financing.)  So it seems the market may have slightly over-corrected.

Like the stock market, which dives to lows not seen in decades one day, only to rebound the next as low prices stimulate buyers, the housing market, although it operates on a much slower time frame, will rebound as buyers realize the great values out there. 

We don’t expect prices to rise, as the inventory is still way too high for prices to be bid up.   But the number of sales will increase significantly.  Your home could be among those to go under contract in the coming Spring Market ‘bump’.  Call me at 908 303-8130 for a free consultation.

Speaking of inventory, here’s this month’s Inventory Index:

Free home sale price analysis and marketing consultation, please call me at  908 303-8130
or contact me here.

Don Sherblom.  RE/MAX Town & Country
44 Leigh Street, Clintn, NJ 08809 
(908)  303-8130

Find your next home fast – Search the MLS at  http://ClintonRealEstate.com