Strong Pending Home Sales to Start Year

Homes sales are off to a strong start this Year. There were 293 pending sales during January. That is the third best January on record. See Chart 1.

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The strength in sales was not uniform across all price ranges. Like last year, much of the growth in sales was at the low end of the market. Median home prices were down to $227,500 from $244,900 a year ago.

That 7% dip in median price reflects both a drop in values market wide and a drop in sales in the mid to upper price ranges. Last January, for example, there were 21 home sales priced at $400,000 and higher. This year, there were only 10 sales in that price range. Fewer sales in the upper price ranges is somewhat skewing the pricing data.

Lower prices and the $8,000 first-time home buyer tax credit are keeping the lower-end of the market moving along. Sales below $200,000 were up an astonishing 47% in 2009. Expect sales in that range to continue to be robust. Sales overall were down 4% last year.

As prices in the mid to upper end of the market come back to levels that reflect today’s values, those sellers will see more sales activity. Trade-up buyers are out there, armed with a $6,500 tax credit for repeat buyers. They are simply waiting to find value.

Buyers are looking for value, and they are acting quickly when they see it. Well-priced homes in all price ranges are selling at a record pace. Homes that did not require a price reduction were selling in an average of just 32 days (See Chart 2). That is nearly two weeks faster than at the peak of the seller’s market in 2006.

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By the same token, overpriced homes were ignored by buyers. These homes sat on the market nearly six months longer. Remarkably, these homes sold in an average of just 29 days after the price was reduced to market value.

Statistics compiled by Coldwell Banker Evergreen Olympic Realty, Inc. from the NWMLS database. Statistics not compiled or published by NWMLS.