For the first time in five years, existing home sales nationwide have increased for four months in a row, according to the National Association of Realtors. Existing home sales rose 7.2% to a seasonally adjusted rate of 5.24 million units in July from a level of 4.89 million in June and are 5.0% above the 4.99 million unit pace in July 2008. The last time this occurred was in 2004. “The housing market has turned for the better with first time home buyers taking advantage of the $8,000 tax credit and the affordability index rising,” according to Mr. Yun, Chief Economist from NAR. Nationally, first time home buyers accounted for over 30% of the sales, and distressed homes accounting for 31%. According to Freddie Mac, the average interest rate fell to 5.22% on a 30 year conventional mortgage with 20% or greater down.

Sales activity in Douglas County was mixed compared to last August as closed sales grew by 2.9%. However pending sales dropped 3.2% and new listings increased by 6.5%. Comparing August 2009 with July 2009, closed sales dropped 11.3% (71 v. 80). Pending sales declined 10% (90 v. 100). New listings also fell 9.4%(231 v. 235). At this month’s rate of sales the 1,287 active residential listings would last approximately 18.1 months. This rate is up from last month by nearly 3 months. (18.1 v. 15.8) but down from 20.3 months of inventory in August 2008.

The average sales price for August 2009 was up 7.5% compared to August 2008. ($195,900 v. $190,200). However, the average sales price year to date is down 16.0% ($159,000 v. $190,200). Many sellers are adjusting their prices downward to meet the market and some decreasing their asking prices by over 25%. My recommendation is for sellers to price their home 10-12% below the average sales price in their area and they will stand a better chance of generating an offer on their property. It appears that our local economy is still sliding downward. We are not noticing any signs of improvement either. As you know, all the credit markets are operating more cautiously which they should be. Many consumers that have money are sitting on the sidelines waiting for the costs of goods and services to drop even more. The unemployment rate in Douglas County of 18+% is the second highest in the state. For many, unemployment benefits are running out soon, so we are headed for a tough winter. We need to encourage many of our local businesses to hire employees and encourage those that are seeking work to return to school for further training. If you choose to buy, please buy locally, it helps us all. I wish you all the best and thank you for doing business with our firm.

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