When deciding on how the real estate market is doing, we must first identify to which market we are referring the residential resale market, new residential construction market, or the various types of commercial real estate. We must also look at what geographical location to consider since some areas are doing better than others.
When assessing the residential resale market, there are two issues to consider — 1) number of actual sales and 2) home prices. With 2007 concluded, many who are reporting on the final figures are passing judgment on whether the year was good or bad. If you look at the second issue of home prices, the growing oversupply of inventory in most areas has pushed prices downward. For buyers who purchased two to three years ago who must sell today, that is not good news. For buyers who are looking to purchase today, it is great news to have many choices of homes at lower prices.
Lets consider the first issue the number of actual sales in 2007. Back in 2001, the number of resale (existing) homes nationally hit an all time record of 5.3 million sales and the market was good. In 2002, we were thrilled to see another record at 5.6 million home sales which was considered a great year in real estate. Although some thought it couldnt get any better, the market continued to reach new heights each year: 2003 = 6.2 million, 2004 = 6.8 million, 2005 = 7.1 million. Then in 2006, inventories were growing, but still 6.5 million homes were sold. Although less than the peak of the previous year, it was still the third best year in history. Then, despite all the doom and gloom from the media about the market in 2007, 5.6 million homes were sold, the same number sold as our great year of 2002.
People are still buying existing homes and they should. Sellers are still selling their homes, not for as much as two and three years ago, but for most, more than they bought it for. If we can assist you or any one you know to better understand what is happening in our current market, please let us know.